If an Earthquake Destroys Some of the Capital Stock, the Neoclassical

question 109

Multiple Choice

If an earthquake destroys some of the capital stock, the neoclassical theory of distribution predicts that:

• A)the real wage will rise, and the real rental price of capital will fall.
• B)both the real wage and the real rental price of capital will fall.
• C)both the real wage and the real rental price of capital will rise.
• D)the real wage will fall, and the real rental price of capital will rise.

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