Assume that an economy is in equilibrium when there occurs an increase in the supply of capital.The available quantity of labor remains fixed.Once the economy has adjusted to its new equilibrium,which of the following has increased?
A)the real wage
B)the rental price of capital
C)the share of capital income in national income
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

An increase in the supply of capital, with labor fixed, typically leads to an increase in the marginal productivity of labor, which raises the real wage.

Assume That an Economy Is in Equilibrium When There Occurs