ANALYTICAL PROBLEM: Suppose that a low savings rate and a slowdown in investment over time has led to an overall decline in the capital stock, as worn out capital has not been replaced in the economy.

The effect of the decline in the capital stock on the labor market is to cause the labor demand curve to __________.

A. remain unchanged B. split in two C. shift to the right D. shift to the left

This results in full employment __________.

A. remaining unchanged B. falling C. no way to determine D. rising

This results in the real wage __________. A. falling B. rising C. no way to determine D. remaining unchanged