Assume an Economy Experiences an Increase in Productivity That Occurs

question 57

Multiple Choice

Assume an economy experiences an increase in productivity that occurs as a result of a more widespread implementation of a major technological breakthrough. Given this information, we would expect which of the following to occur?

• A) Aggregate demand would shift to the left.
• B) Aggregate demand would not change.
• C) Aggregate demand would shift to the right.
• D) Both the aggregate demand and aggregate supply curves would shift to the right.
• E) Both the aggregate demand and aggregate supply curves would shift to the left.

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Definitions:

Comparative Balance

A financial statement that presents balances of accounts or financial metrics at different points in time for comparison.

Direct Method

A method of preparing the cash flow statement where actual cash flow information from operating activities is directly listed.

Operating Activities

Business functions that are directly related to the production and delivery of goods and services, generating the primary revenue streams for a company.

Cash Dividends

Payments made to shareholders out of a corporation's earnings, representing a proportion of the profits.