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Equilibrium market prices for capital and labour are OMR10 and OMR8, respectively. Then, the economy experiences one or more supply shocks, so that the marginal
Equilibrium market prices for capital and labour are OMR10 and OMR8, respectively. Then, the economy experiences one or more supply shocks, so that the marginal product of capital is OMR12, and the marginal product of labour is OMR9. Assuming that the available quantities of capital and labour are fixed, which of the following is (are) likely todecreaseas the economy approaches its new equilibrium?
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