Question

Holding other factors constant, if new technology becomes available that allows machines to produce manufactured goods more quickly and with fewer defects, then the real interest rate will ______ and the equilibrium quantity of national saving and investment will ____.

Answer 1

Answer: Increase; increase

Explanation:

Efficiency is so vital to business and manufacturing. The ability of a business to produce and curb minimal loss will give a boast on production and encourage manufacturers to do more, especially when they have the ability to produce in large quantity (by batches) and still get a good ratio for the number of goods manufactured. This is where machines has aided productivity, as they were introduced, productivity increased and they were minimal loss and time waste when producing. When technology allows for more of this effective machines, manufacturers will produce more and there would be a boast in investment.