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Agraria specializes in the production of cotton. However, cotton manufacturers in Agraria are ...

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Agraria specializes in the production of cotton. However, cotton manufacturers in Agraria are ...

Agraria specializes in the production of cotton. However, cotton manufacturers in Agraria are expecting the demand for its exports to fall sharply because of growing competition from a neighboring country. Assuming all else equal, which of the following is likely to happen in this case?

▸ The equilibrium real wage in Agraria will rise.

▸ The equilibrium unemployment in Agraria will fall.

▸ Investment expenditure in Agraria will rise.

▸ Consumption expenditure in Agraria will fall.

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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