if-a-country-experiences-a-technological-regression-what-sequence-of-events-woul

Question

If a country experiences a technological regression, what sequence of events would the Real Business Cycle Model predict?

Accepted Answer

Decrease in aggregate supply, followed by a decrease in aggregate demand and employment

Answer

Increase in aggregate supply, followed by an increase in aggregate demand and employment

Answer

Decrease in aggregate demand, followed by an increase in aggregate supply and employment

Answer

Increase in aggregate demand, followed by a decrease in aggregate supply and employment