If there is a permanent increase in technology, A, then we expect consumption to:
A)increase by more than real GDP.
B)increase by the same amount as real GDP.
C)increase but by less than real GDP.
D)be unchanged.

Question

Quizplus · Accepted Answer

When there is a permanent increase in technology, it boosts productivity, leading to an increase in real GDP. While consumption is expected to increase as a result of higher income and output, it typically increases by less than real GDP because part of the additional income generated is saved and invested, rather than consumed.

If There Is a Permanent Increase in Technology, A, Then