In the Long Run, Which of the Following Explains Why

question 100

Multiple Choice

In the long run, which of the following explains why there are no changes to returns to capital and wages when FDI or labor immigration occurs?

• A) World prices of output are unchanged.
• B) Marginal productivities are unchanged.
• C) There is no change in the capital-labor ratio in either industry.
• D) World prices of output and marginal productivities are unchanged.

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