Capital Deepening: Analyzing Statements

Capital deepening refers to the process in which an economy increases its stock of capital relative to its labor force. This often leads to higher productivity as workers have more tools and equipment at their disposal. Consider the following statements regarding capital deepening:

1. It always results in increases in output per worker.

2. It can be achieved through improvements in technology or increases in savings and investment.

3. It is typically associated with increases in the wage level, assuming demand for labor remains constant.

Which of the following statements about capital deepening is true?