The Introduction of a New Technology That Raises the Marginal

question 69

Multiple Choice

The introduction of a new technology that raises the marginal product of new capital will:

• A)decrease real interest rates and increase the equilibrium quantity of saving supplied and demanded.
• B)decrease real interest rates and the equilibrium quantity of saving supplied and demanded.
• C)increase real interest rates and the equilibrium quantity of saving supplied and demanded.
• D)increase real interest rates and decrease the equilibrium quantity of saving supplied and demanded.

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Definitions:

Second Earners

Refers to individuals in a household who contribute income in addition to the primary breadwinner, often impacting households' labor supply decisions and overall economic dynamics.

Price Elasticities

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Deadweight Loss

An economic inefficiency that occurs when the allocation of resources is not optimal, often resulting from taxes or monopolies.

Behavioural

Relating to or focusing on the actions or reactions of individuals, often in response to external stimuli.