The argument was made that as we have a growing

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investments or consumption spending. The argument was made that as we have a growing population of older adults, healthcare expenditures must increase to aid in the extension of life and improvement of the inevitable decline in health as people age. Since older adults are more likely to spend on their health than on goods used for enjoyment or entertainment, then the spending on these non-healthcare related goods will be crowded out.
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By using a similar argument, I could say that increasing entertainment expenditures by supporting gambling in Nebraska would only have an effect on other entertainment expenditure types rather than on other components of GDP. This means that things like investments would remain unaffected. As a result, other types of entertainment would be crowded out, which may not be as positive for the economy. 3. Critical Thinking: According to the discussion on shifts in the natural rate of unemployment on page 332, how might the rapid aging of the US population over the next 20 years or so affect the natural rate of unemployment? One of the factors said to have an effect on the natural rate of unemployment is demographics. If the demographics of the workforce change, such as a decrease in the older adults in the workforce due to retirement, then that could lead to lower levels for the natural rate of unemployment. This would occur because more older adults leaving their jobs opens up spots for younger workers to take over, increasing employment rates and decreasing unemployment. However, let’s say that the older population starts to decline in their work productivity over time as they age, then their wages could in turn rise more slowly. This could lead to older works trying to advocate for higher nominal wages and be unwilling to accept the lower nominal wages. This alone could actually increase natural rate of unemployment. Perhaps, in the short run, the natural rate of unemployment would increase due to a decreased rate of labor productivity, but as older adults leave their jobs for retirement, in the long run we could see a decrease in the natural state of unemployment.
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