Explain adrop in the level of capital

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Consider an economy that abides by the classical mode. The production function is unspecified, but we know that the Theory of Distribution (ToD)[W/P=MPN] holds. Suppose there is adrop in the level of capital. What is the impact upon this economy? Your answer should include the impact upon (W,W/P, N, Y, P). Graphs and written discussion are required.

Reference no: EM13176460

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