Multiple Choice
Scenario: Red Country and Purple Country have identical aggregate production functions. The amount of physical capital stock available to each country is equal. Labor supply in Red Country is HR, while the labor supply in Purple Country is HP.
-Refer to the scenario above.How will a one-unit increase in the efficiency units of labor change output in Red Country relative to Purple Country?
A) Output will increase more in Red Country.
B) Output will decrease more in Red Country.
C) Output will increase less in Red Country.
D) Output will decrease less in Red Country.
Correct Answer:
Verified
Correct Answer:
Verified
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