the economics of money, banking, and financial markets

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4. 
   

   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 the
   inflation rate 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: B
   Diff: 2 Type: MC Page Ref: 584
   Skill: Recall
   Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
   aggregate demand and supply framework

   
   


5. 
   

   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 long run and ____ in the
   inflation rate in the short run.
   A) an increase; an increase
   B) a decrease; a decrease
   C) no change; a decrease
   D) no change; no change
   Answer: C
   Diff: 2 Type: MC Page Ref: 584
   Skill: Recall
   Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
   aggregate demand and supply framework

   
   


6. 
   

   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 and ____ in the aggregate price
   level in the long run.
   A) an increase; an increase
   B) a decrease; a decrease
   C) a decrease; an increase
   D) no change; no change
   Answer: D
   Diff: 2 Type: MC Page Ref: 584
   Skill: Recall
   Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
   aggregate demand and supply framework