ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -However, there are diminishing marginal returns to capital accumulation, so extra amounts of capital gives progressively smaller and smaller increases in output. This means the second derivative of output with respect to capital is negative.
Detailed explanation-2: -An increase in capital per hour (or capital deepening) leads to an increase in labor productivity.
Detailed explanation-3: -Capital per worker decreases when investment per worker is lower than depreciation per worker. Output per worker decreases accordingly. Capital per worker is constant when investment per worker is equal to depreciation per worker.
Detailed explanation-4: -Productivity is the key source of economic growth and competitiveness. A country’s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker (i.e., producing more goods and services for a given number of hours of work).