Consider an Economy Starting from a Position of Full Employment

question 113

Multiple Choice

Consider an economy starting from a position of full employment.Which one of the following occurs as a result of an advance in technology?

• A)Real GDP decreases in the short run.
• B)The price level falls.
• C)Factor prices rise in the long run, shifting the short- run aggregate supply curve leftward.
• D)An inflationary gap arises.
• E)The long- run aggregate supply curve shifts leftward to create the new long- run equilibrium.

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Definitions:

Recent Years

A term referring to the very latest past period, often without specifying the exact duration.

Defined Benefit Pension Plans

Retirement plans where an employer guarantees a specified pension amount to employees based on salary history and length of service.

Defined Contribution Plans

Retirement savings plans where the amount of the retirement benefits is determined by the contributions made by the employee and/or the employer.

Retirement Income

Money an individual receives after retiring from active employment, usually in the form of pensions, savings, or investments.