Understanding Capital Deepening

Very Easy Economic Growth And Development Capital Deepening

In the context of economic growth, capital deepening refers to the process where an economy increases its capital per worker, thereby improving productivity. A nation may invest in new machinery, technology, or infrastructure, enabling workers to produce more efficiently. This phenomenon is essential for fostering long-term economic growth.

Which of the following statements best encapsulates the concept of capital deepening?

Capital deepening occurs when a country invests in additional human capital, improving the skills and capabilities of its workforce.

Capital deepening happens when an economy invests in physical capital, enhancing its productive capacity.

Capital deepening refers to the increase in natural resources available to a country, such as land and minerals.

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