In the long run, which of the following explains why are there no changes to returns to capital and wages when FDI or labor immigration occurs?
a. World prices of output are unchanged.
b. Marginal productivities are unchanged.
c. There is no change in the capitallabor ration in either industry.
d. World prices of output and marginal productivities are unchanged.
Ans: c. There is no change in the capitallabor ration in either industry.
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