Understanding Capital Deepening

Very Easy Economic Growth And Development Capital Deepening

Capital deepening refers to an increase in the amount of capital per worker in an economy. This concept plays a critical role in understanding economic growth since more capital can lead to increased productivity.

Which of the following best describes the outcome of capital deepening in an economy?

It leads to an increase in the unemployment rate.

It generally results in higher productivity and economic growth.

It decreases the overall capital stock in the economy.

Hint

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