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Consider an Economy Starting from a Position of Full Employment

Question 113

Multiple Choice

Consider an economy starting from a position of full employment.Which one of the following occurs as a result of an advance in technology?


A) Real GDP decreases in the short run.
B) The price level falls.
C) Factor prices rise in the long run, shifting the short- run aggregate supply curve leftward.
D) An inflationary gap arises.
E) The long- run aggregate supply curve shifts leftward to create the new long- run equilibrium.

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