Impact of Capital Deepening on Economic Growth

In the context of economic growth, capital deepening refers to an increase in the amount of capital per worker in an economy. This concept highlights the importance of investing in physical capital, such as machinery and infrastructure, to enhance productivity.

Consider an economy that has recently implemented policies to promote capital deepening. The government has invested heavily in advanced manufacturing technologies and has encouraged firms to adopt automation practices. As a result, productivity in the manufacturing sector has seen significant improvements.

Which of the following statements best describes the potential impact of capital deepening on this economy?