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:

Balance of Trade

The difference between a country's exports and imports of goods and services.

Exports

Goods or services sold by a country to buyers in other countries, contributing to the exporting nation’s economy.

Imports

Goods or services brought into one country from another to satisfy domestic consumption or production needs.

Exchange Rate

The price at which one currency can be exchanged for another, playing a critical role in international trade and finance.