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If a Technological Advancement Increases Productivity, the Neoclassical Theory of Distribution

Question 39

Multiple Choice

If a technological advancement increases productivity, 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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