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According to classical economists, real wage rate is ______ to the Marginal Productivity of Labour.
Equal
More
Less
None of these
- Option 1: Equal
- The real wage rate is equal to the Marginal Productivity of Labour.
- Classical economists believe in a competitive market where wages adjust to reflect the productivity of workers.
- Option 2: More
- This would imply workers are paid more than their contribution to output, which is unsustainable in the long run for employers.
- Option 3: Less
- Suggests exploitation, as workers earn less than their productivity, though classical theory typically considers the market self-correcting.
- Option 4: None of these
- This would imply a different relationship, which doesn't align with classical economic theory.
By: santosh ProfileResourcesReport error
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