Assume an Economy Experiences an Increase in Productivity That Occurs

question 62

Multiple Choice

Assume an economy experiences an increase in productivity that occurs as a result of the more efficient use of existing technologies.Given this information,we would expect which of the following to occur?

• A)aggregate demand would not change
• B)aggregate demand would shift to the right
• C)aggregate demand would shift to the left
• D)both the aggregate demand and aggregate supply curves would shift to the left

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Definitions:

Student Loans

Borrowed money that is used to pay for educational expenses and is expected to be paid back with interest.

Discount Rate

The rate of interest applied to loans provided to commercial banks and other financial institutions by the Federal Reserve through its discount window.

Present Value

The contemporary valuation of a sum of money to be received in the future, or of ongoing cash flows, based on an agreed upon return rate.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.