Which of the following factors contribute to the emergence of stationary state in Ricardo's model ?…
All four factors contribute to the stationary state in Ricardo's model. Diminishing agricultural returns raise the cost of subsistence and the money wages needed to support…
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Which of the following factors contribute to the emergence of stationary state in Ricardo's model ? Select the correct answer:
(a) Diminishing returns in agriculture
(b) Falling profits
(c) Rising wages
(d) Rising rents
Answer and explanation
Correct answer C
All four factors contribute to the stationary state in Ricardo's model. Diminishing agricultural returns raise the cost of subsistence and the money wages needed to support workers, while rents rise. The resulting pressure on profits weakens capital accumulation until growth ceases.
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Rajasthan SET (RSET)