Following an increase in current total factor productivity, the movement along the output demand curve is caused by:

A. higher consumption.

B. higher consumption and investment.

C. higher investment.

D. higher government expenditures.

An expected future increase in total factor productivity does NOT affect

A. current labor demand.

B. current wages.

C. current output demand.

D. current investment demand.

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Related questions

When government spending increases, the first shift in the labor supply curve is due to a/an ____________ effect, and the second shift is due to a/an _____________ effect.

A. income; substitution

B. substitution; income

C. substitution; income

D. income;income

Consider the effects on current consumption due to an expected future increase in total factor productivity. The substitution effect follows from the change in _____________ and the income effect follows from the change in _____________.

A. the umemployment rate; the real wage rate

B. the real wage rate; the tax rate

C. the marginal product of labor; the marginal product of capital

D. the real interest rate; the consumer's lifetime weath.

Why does a future increase in total factor productivity affect current investment demand?

A. Because current captial decreases

B. Because the current marginal product of capital increases.

C. Because the future marginal product of capital increases

D. None of the above