Economics · Theories of Economic Growth
According to David Ricardo's classical model of development, diminishing returns in agriculture lead to which of the following long-term outcomes?
- 1Structural unemployment across the economy
- 2Equalization of profits across all economic sectors
- 3Rising real wages and a higher profit share
- 4A long-term tendency of falling profits and rising rents✓
Correct answer
A long-term tendency of falling profits and rising rents
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