If Natural Gas Is Replaced by Solar Power as a More

question 31

Multiple Choice

If natural gas is replaced by solar power as a more efficient form of energy, we should expect _____.

• A)a leftward shift of the aggregate supply curve
• B)higher production prices at every output level
• C)a decline in the growth of total output
• D)a decrease in the stock of energy-efficient capital goods
• E)an increase in total factor productivity

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Definitions:

Adam Smith

A Scottish economist and philosopher, often considered the father of modern economics, known for his works on the principles of free markets and the "invisible hand."

Quantity Theory

An economic theory that relates the quantity of money in an economy to the level of prices of goods and services.

Monetary Policy

The process by which a central bank controls the money supply, aiming at specific economic targets such as controlling inflation, stimulating economic growth, and reducing unemployment.

Classical Economics

A school of thought in economics that emphasizes the idea that free markets can regulate themselves through the laws of supply and demand.