An economy is at full employment when firms adopt new technology. Which of the following occurs as a result of an advance in technology?

Question

Answer

Real GDP decreases in the short run.

Answer

As the money wage rate rises in the long run, the short-run aggregate supply curve shifts leftward.

Answer

The price level falls.

Answer

An inflationary gap arises.

Answer

The long-run aggregate supply curve shifts leftward to create the new long-run equilibrium.

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