Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q92 (CDS-II/2016) Economy › Basic Concepts & National Income › Economic growth indicators Answer Verified

Capital deepening refers to

Result
Your answer: —  Â·  Correct: A
Explanation

Capital deepening refers to an increase in the capital-to-labor ratio within an economy [1]. It occurs when the amount of fixed capital, such as machinery, equipment, and infrastructure, increases relative to the number of workers. This process allows each unit of labor to have more capital to work with, which typically enhances labor productivity and output per worker [2]. Unlike capital widening, which involves increasing both capital and labor to maintain a constant ratio, capital deepening specifically focuses on giving more machines or tools to the same number of workers, making the production process more capital-intensive. While it drives economic growth by improving worker efficiency and technology adoption, it can lead to a decline in capital productivity due to diminishing returns [1]. Therefore, it is best described as going for more fixed capital per worker.

Sources

  1. [1] https://www.abs.gov.au/statistics/detailed-methodology-information/concepts-sources-methods/australian-system-national-accounts-concepts-sources-and-methods/2020-21/chapter-19-productivity-measures/concepts
  2. [2] https://en.wikipedia.org/wiki/Capital_deepening
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
50%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

CDS-I · 2022 · Q40 Relevance score: -4.19

Which one of the following terms denotes the inputs in terms of tools, machines, buildings, raw materials and money in hand required at any stage of production ?

IAS · 2024 · Q47 Relevance score: -5.60

With reference to physical capital in Indian economy, consider the following pairs : 1. Farmer's plough - Working capital 2. Computer - Fixed capital 3. Yarn used by the weaver - Fixed capital 4. Petrol - Working capital How many of the above pairs are correctly matched ?

IAS · 2018 · Q50 Relevance score: -5.69

Despite being a high saving economy, capital formation may not result in significant increase in output due to

IAS · 2018 · Q49 Relevance score: -6.17

Consider the following statements : Human capital formation as a concept is better explained in terms of a process which enables 1. individuals of a country to accumulate more capital. 2. increasing the knowledge, skill levels and capacities of the people of the country. 3. accumulation of tangible wealth. 4. accumulation of intangible wealth. Which of the statements given above is/are correct ?

CDS-I · 2014 · Q59 Relevance score: -6.24

According to the Companies Act, 2013, ‘nominal capital' implies