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

Question

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

Accepted Answer

∻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.⚹◊What statistical methods can be used to analyze the correlation between a government policy that leads to more development of technology and the resulting economic scenarios described in the multiple-choice question?⍭ Generate me a similar question◊

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