Suppose there is a major breakthrough in renewable energy technology, leading to a surge in investment by businesses to adopt this new technology. Using the aggregate demand-aggregate supply model, what impact will this have on the economy? a) This will shift aggregate demand left, which will cause output to fall and the price level to fall. b) This will shift aggregate demand right, which will cause output to rise and the price level to rise. c) This will shift short-run aggregate supply left, which will cause output to fall and the price level to rise. d) This will shift short-run aggregate supply right, which will cause output to rise and the price level to fall.

Suppose there is a major breakthrough in renewable energy technology, leading to a surge in investment by businesses to adopt this new technology. Using the aggregate demand-aggregate supply model, what impact will this have on the economy? a) This will shift aggregate demand left, which will cause output to fall and the price level to fall. b) This will shift aggregate demand right, which will cause output to rise and the price level to rise. c) This will shift short-run aggregate supply left, which will cause output to fall and the price level to rise. d) This will shift short-run aggregate supply right, which will cause output to rise and the price level to fall.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical

Section: Chapter Questions

Problem 16E

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