Suppose advances in computer technology lead to a surge in worker productivity. In the long run,output will ________ and the price level will ________.
A) increase; increase
B) increase; decrease
C) increase; remain unchanged
D) decrease; decrease
E) remain unchanged; remain unchanged

Question

Quizplus · Accepted Answer

An increase in worker productivity leads to an increase in output, which in turn leads to an increase in supply. As supply increases, prices decrease due to a surplus of goods and services. Therefore, the long-run effect of advances in computer technology on output and prices is an increase in output and a decrease in the price level.

Suppose Advances in Computer Technology Lead to a Surge in Worker