Assume That an Economy Is in Equilibrium When Technological Progress

question 42

Multiple Choice

Assume that an economy is in equilibrium when technological progress causes an increase in total factor productivity.Once the economy has adjusted to its new equilibrium,and assuming that the supplies of capital and labor remain unchanged,which of the following has increased?

• A)the real wage
• B)the share of capital income in national income
• C)the share of labor income in national income
• D)all of the above
• E)none of the above

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