Given a wage for labor and a planned level of output, an increase in the rental price of capital can be expected to
A) increase the employment of both labor and capital.
B) increase the employment of capital but reduce the employment of labor.
C) increase the employment of labor but reduce the employment of capital.
D) reduce the employment of both capital and labor.
E) cause adjustments in the employment of capital and labor of indeterminate direction.
Correct Answer:
Verified
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