Suppose Over the Next Several Years the Productivity of Firms

question 72

Multiple Choice

Suppose over the next several years the productivity of firms producing electric cars improves dramatically.The advance in productivity leads to

• A) a decrease in the supply of electric cars so that the supply curve shifts leftward.
• B) a decrease in the supply of electric cars so that the supply curve shifts rightward.
• C) an increase in the supply of electric cars so that the supply curve shifts leftward.
• D) an increase in the supply electric cars so that the supply curve shifts rightward.
• E) no change in the supply of electric cars, only a change in the quantity supplied of electric cars.

---

Definitions:

Securitization

The process of transforming illiquid assets into a tradable form by converting them into securities.

Private Equity

Capital investments made into companies that are not publicly traded, often to finance growth, acquisitions, or restructuring.

Dodd-Frank Reform Act

A comprehensive piece of financial regulation passed in 2010 in the United States, aimed at preventing the recurrence of financial crises through increased regulation.

Capital Requirements

The minimum amount of capital a bank or other financial institution must hold as required by its financial regulator.