Sia
Question
Statistics
Posted 10 months ago
Which of the following is the most likely effect of a government policy that leads to more development of technology used by firms throughout an economy?
Choose 1 answer:
(A) a positive demand shock and a lower growth rate
(B) a negative supply shock and a higher price level
(C) a positive supply shock and a higher price level
(D) a negative demand shock and a lower price level
(E) a positive supply shock and higher growth rate
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Answer from Sia
Posted 10 months ago
Solution by Steps
step 1
Identify the economic impact of technological development: Technological advancements typically increase productivity, which can lead to a positive supply shock
step 2
Analyze the options: A positive supply shock would likely increase the supply of goods and services in the economy, which could lead to lower prices and higher growth rates due to increased efficiency and potential output
step 3
Match the analysis with the provided options: The option that aligns with the analysis of a positive supply shock leading to higher growth rates is option E
Answer
E
Key Concept
Positive Supply Shock
Explanation
A government policy that leads to more development of technology used by firms is likely to cause a positive supply shock, which can result in higher growth rates for the economy.
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