Answer :
Final Answer:
The major technology improvement with widespread applicability across the economy would lead to an increase in aggregate supply and potential long-term economic growth.
Explanation:
a. A major technology improvement with widespread applicability across the economy has significant implications for the macroeconomic equilibrium. In the short run, this development would lead to an increase in aggregate supply (AS). As technology improves, businesses can produce more output with the same amount of inputs, leading to higher productivity. This means that at the existing price level, businesses can produce and supply more goods and services.
In the short run, the increase in aggregate supply could result in a decrease in the price level and an increase in real output, a phenomenon known as deflationary gap. As businesses expand production due to increased technological efficiency, they hire more workers and purchase more inputs, stimulating economic activity.
In the long run, the major technology improvement can lead to sustained economic growth. The increase in aggregate supply can be maintained as long as the economy continues to invest in capital, adopt new technologies, and enhance its productivity. This can contribute to an upward shift in the economy's potential output and a higher level of real GDP.
In conclusion, a major technology improvement with widespread applicability has the potential to increase aggregate supply in the short run, leading to increased economic activity. In the long run, it can drive sustained economic growth by boosting productivity and potential output. This scenario highlights the dynamic nature of the economy and how technological advancements can influence macroeconomic equilibrium and growth prospects.
Learn more about Technology
brainly.com/question/15059972
#SPJ11
