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Which in turn obviously depends on investment expenditure

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The natural rate of employment depends on the stock of capital, which in turn obviously depends on investment expenditure. The natural rate also depends on technical progress, which is also likely to depend on levels of investment and research and develop- ment spending. Suppose that governments can affect investment in the short term by de- mand management policies. Does it follow that demand management must have long-term impacts on the level of employment?

Reference no: EM13888000

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