After an Advance in Technology That Improves Productivity, a Country's

question 116

Multiple Choice

After an advance in technology that improves productivity, a country's short-run aggregate supply curve will:

• A) shift to the right.
• B) shift to the left.
• C) rotate to a steeper slope.
• D) rotate to a more horizontal slope.

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Definitions:

Fixed Costs

Overheads, such as rent, insurance fees, and payroll, that stay the same, independent of the amount of goods produced or sold.

Sensitivity Analysis

An analysis method to evaluate how changes in the values of an independent variable influence a dependent variable, based on a set of given assumptions.

NPV

Stands for Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.

Scenario Analysis

The process of analyzing and evaluating possible future events by considering various feasible outcomes or scenarios, typically to assess potential risks and impacts.