ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Capital deepening means there is more money to hire workers
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Capital deepening increases people’s savings rate
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Greater skill increases workers’ output.
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Human capital increases GDP
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Detailed explanation-1: -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-2: -Why does capital deepening work with human capital? Greater skill increases workers’ output.
Detailed explanation-3: -Human capital allows an economy to grow. When human capital increases in areas such as science, education, and management, it leads to increases in innovation, social well-being, equality, increased productivity, improved rates of participation, all of which contribute to economic growth.
Detailed explanation-4: -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.
Detailed explanation-5: -In economics, capital refers to the assets-physical tools, plants, and equipment-that allow for increased work productivity. By increasing productivity through improved capital equipment, more goods can be produced and the standard of living can rise.