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wallyboy wallyboy
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Perylia produced 10 million tons of wheat in a certain year, using a given stock of capital, K, and efficiency units of labor, L. It was able to increase production to 15 million tons within 2 years without any increase in its physical capital stock or the efficiency units of labor. Suppose wheat is the only good produced in Perylia. What is a likely reason for the increase in production? Explain with a suitable diagram.
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Macroeconomics


Edition: 3rd
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ordinarykathyordinarykathy
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More solutions for this book are available here
An improvement in technology enables an economy to produce a higher amount of output from the same amount of physical capital stock and labor. Thus, an improvement in technology is the reason behind Redland's increased output. Such an improvement in technology causes an economy's aggregate production function to shift upward as shown in the figure below:



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wallyboy Author
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3 months ago
Thank you, thank you, thank you!
yen
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Brilliant
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2 hours ago
Good timing, thanks!
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