A storm destroys several factories, thereby reducing the stock of capital. What effect does this event have

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A storm destroys several factories, thereby reducing the stock of capital. What effect does this event have on factor markets?

a Wages and the rental price of capital both rise.

b Wages and the rental price of capital both fall.

c Wages rise, and the rental price of capital falls.

d Wages fall, and the rental price of capital rises.

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Advanced Macroeconomics

ISBN: 9780415205504

3rd Edition

Authors: David Romer

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Question Posted: Nov 14, 2024 05:01 AM

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A storm destroys several factories, thereby reducing the stock of capital. What effect does this event have

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Advanced Macroeconomics

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