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Please help me with the following question:
Consider Gambinia that produces manufacturing and agricultural products. Assume that land is a factor used specifically in the agricultural sector, and capital is used in manufacturing sector only. If the price of agricultural products on the world market increases, capital owners in which sector will benefit the most:
A) Agricultural
B) Manufacturing
C) Nominal rent will increase in agricultural sector but real rent will not change
D) Both sectors will lose
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What caution would you voice on this matter, and what type of information would you gather before making this decision?
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