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Assume Industry Country relies more heavily on the use of capital and Farm Country relies more ...

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Assume Industry Country relies more heavily on the use of capital and Farm Country relies more ...

Assume Industry Country relies more heavily on the use of capital and Farm Country relies more heavily on the use of labor in production. Holding labor constant, which country's output would be more negatively affected by a big storm that destroys large parts of the existing infrastructure?

▸ Labor Country

▸ Industry Country

▸ Both countries equally

▸ Both countries equally if their initial GDP is equal

Textbook

Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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Thanks

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