how-would-a-sudden-increase-in-technology-affect-potential-gdp-in-the-new-classi

Question

How would a sudden increase in technology affect potential GDP in the New Classical Model?

Accepted Answer

It would likely increase potential GDP by improving resource utilization.

Answer

It would cause potential GDP to fluctuate unpredictably.

Answer

It would decrease potential GDP due to increased unemployment.

Answer

It would have no effect on potential GDP.