Suppose the Economy Is Producing at the Natural Rate of Output

Multiple Choice

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant,the development of a new,more productive technology will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run.

A) an increase;an increase
B) a decrease;a decrease
C) a decrease;an increase
D) no change;no change