Consider the Following News Headline: "Information Technology Costs for Canadian

Multiple Choice

Consider the following news headline: "Information technology costs for Canadian firms continue to drop." Choose the statement below that best describes the likely macroeconomic effect.

A) The AD curve shifts to the right; the price level rises and real GDP rises.
B) The AD curve shifts to the left; the price level falls and real GDP falls.
C) The AS curve shifts to the left; the price level rises and real GDP falls.
D) The AS curve shifts to the right; the price level falls and real GDP rises.
E) The AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP rises.