ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Capital deepening makes workers more productive and leads to higher wages in the long run.

Detailed explanation-2: -Capital deepening refers to an increase in the proportion of the capital stock to the number of labor hours worked. Movements in this ratio are closely tied to movements in labor productivity, all other things held equal. An increase in capital per hour (or capital deepening) leads to an increase in labor productivity.

Detailed explanation-3: -Capital deepening increases the marginal product of labor – i.e., it makes labor more productive (because there are now more units of capital per worker). Capital deepening typically increases output through technological improvements (such as a faster copier) that enable higher output per worker.

Detailed explanation-4: -Capital Deepening is the process in which the amount of capital per unit of labor is increased by investing in technological advancements, thereby increasing the labor productivity, overall production, and reduced cost of production, which in turn leads to an increase in contribution margin.

Detailed explanation-5: -Capital deepening increases the output per worker by improving machinery, transportation, and technology. This helps workers be more productive, which directly contributes to economic growth.