Chapter 7: Q 18. (page 186)
What is capital deepening?
Capital deepening refers to a situation where the level of capital per worker is increasing in the economy.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Say that the average worker in Canada has a productivity level of per hour while the average worker in the United Kingdom has a productivity level of per hour (both measured in U.S. dollars). Over the next five years, say that worker productivity in Canada grows at per year while worker productivity in the UK grows per year. After five years, who will have the higher productivity level, and by how much?
What are the "advantages of backwardness" for economic growth?
What do economists mean when they refer to improvements in technology?
How is the concept of technology, as defined with the aggregate production function, different from our everyday use of the word?
Why does productivity growth in high-income economies not slow down as it runs into diminishing returns from additional investments in physical capital and human capital? Does this show one area where the theory of diminishing returns fails to apply? Why or why not?
What do you think about this solution?
We value your feedback to improve our textbook solutions.
