Capital deepening will occur as long as total saving is greater than depreciation.

Question

Quizplus · Accepted Answer

Capital deepening refers to an increase in the amount of capital per worker. This can happen when there is more investment in capital goods, which can lead to higher productivity and higher wages. Total saving refers to the amount of money available for investment, while depreciation is the decrease in the value of existing capital goods due to wear and tear or obsolescence. If total saving is greater than depreciation, then there is a net increase in investment in capital goods, leading to capital deepening. Therefore, the statement is true.

Capital Deepening Will Occur as Long as Total Saving Is