In the Real Business Model,a Persistent Increase in Total Factor

question 27

Multiple Choice

In the real business model,a persistent increase in total factor productivity causes

• A) real wages to fall.
• B) the price level to rise.
• C) real interest rates to rise.
• D) the output demand curve shifting less than the output supply curve.
• E) the money supply to shift right.

---

Definitions:

Cross-price Elasticity

A measure of how the demand for one good responds to a change in the price of another good.

Shrimp

A small, decapod crustacean commonly found in marine and freshwater environments, often used as food.

Midpoint Formula

A method used to calculate the elasticity of demand or supply by averaging the start and end points of a range.

Price Elasticity

A gauge for the sensitivity of the amount of a good that is demanded or offered to alterations in its pricing.