A sudden technological breakthrough in an economy would:
A)have no impact on real GDP.
B)cause aggregate demand to fall.
C)lower the natural rate of unemployment.
D)increase the price level.
E)cause aggregate supply to rise.

Question

Quizplus · Accepted Answer

A sudden technological breakthrough would lead to an increase in productivity and efficiency, causing aggregate supply to rise. This could potentially lead to a decrease in prices and an increase in output, without necessarily affecting the natural rate of unemployment or aggregate demand. Therefore, the best choice is E - cause aggregate supply to rise.

A Sudden Technological Breakthrough in an Economy Would