Question

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.

Answer 1

Answer:

hi your question is incomplete here is the complete question and options

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

Answer : A decrease, a decrease ( B )

Explanation:

All others factors of production been equal the development of a new, more productive technology will cause the unemployment rate to decrease in the short run because the development of the new productive technology will drive the need to employ manpower to operate and control this new technologies in the short run.

Increase in production will see supply stable and the demand and supply of goods and services will be at equilibrium eliminating room for inflation

Answer 2

Answer:

B. A decrease; a decrease

Explanation:

There will be a decrease in the unemployment rate because the development of a new, more productive technology will cause an increase in the employment status of the suppose economy in the short run. Also in the short run, due to decreases in unemployment rate, there will also be a decrease in inflation rate as productivity will go up and the general level of prices in the supposed economy will go down od decrease.