An Increase in Total Factor Productivity Causes

question 55

Multiple Choice

An increase in total factor productivity causes

• A)real interest rates to rise.
• B)the production function to shift up.
• C)the output supply curve to shift left.
• D)real wages to rise.
• E)labour supply to fall.

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Definitions:

Comparative Advantage

An economic principle that suggests a country, individual, or company is most efficient at producing a certain good or service compared to others, enabling trade benefits.

Absolute Advantage

The ability of a country, company, or individual to produce a good or service at a lower cost per unit than competitors using the same amount of resources.

Soybeans

A leguminous plant originating from East Asia, extensively cultivated for its consumable beans that have various applications.

Alfalfa

Alfalfa is a perennial flowering plant often used as forage for livestock due to its high nutrient content and adaptability to various climates.