Personal computers are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of computers

What will be an ideal response?

Advances in technology increase the supply of computers and the supply curve of computers shifts rightward. The price of a computer thus falls. The demand curve does not shift. Rather, on the demand side there is an increase in quantity demanded, or movement along the curve, in response to the falling price. The equilibrium quantity of computers increases.

Economics

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Which of the following variables will shift the classical aggregate demand curve?

a. An increase in government spending b. A decrease in taxes c. An increase in autonomous investment expenditures d. An increase in the money stock e. All of the above

Economics

If velocity and the money supply are __________________, then when one component of spending rises another component of spending ________________

A) constant; must fall B) constant; must rise C) rising; may not necessarily fall D) rising; must rise

Economics