A Technological Breakthrough That Increases the Marginal Productivity of Capital

question 116

Multiple Choice

A technological breakthrough that increases the marginal productivity of capital would increase the

• A)demand for loanable funds, leading to a lower equilibrium market interest rate
• B)supply of loanable funds, leading to a lower equilibrium market interest rate
• C)demand for loanable funds, leading to a higher equilibrium market interest rate
• D)supply of loanable funds, leading to a higher equilibrium market interest rate
• E)supply of loanable funds but have no impact on the equilibrium market interest rate

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Definitions:

Restriction of Productivity

Limitations or constraints that decrease the efficiency or output of a process, system, or individual's work.

Piece Rate Pay

A compensation system where employees are paid based on the amount of work they complete rather than the hours worked.

Hourly Wage

Compensation paid to an employee based on the number of hours worked.

Variable Pay

A portion of employees’ pay that is based on a measure of performance.