An Economy Has Experienced a Rightward Shift of Its Long-Run

question 125

Multiple Choice

An economy has experienced a rightward shift of its long-run aggregate supply curve and is now producing on that new long-run aggregate supply curve.It is reasonable to expect that

• A) the cyclical unemployment rate has fallen.
• B) the cyclical unemployment rate has been unaffected.
• C) the inflation rate has risen.
• D) the price level has risen.
• E) productivity has fallen.

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Definitions:

Innovation

The act of introducing something new, such as an idea, method, or device, intended to enhance efficiency, effectiveness, or pleasure.

Relative Advantage

The degree to which an innovation is perceived as better than the idea it supersedes.

Diffusion

The process through which an innovation is communicated over time among the participants in a social system.

Innovation

The act of inventing, evolving, and applying novel concepts, goods, or techniques to enhance or substitute the current ones.