If in an economy the human capital increases with the increase in the physical capital,

Question

Quizplus · Accepted Answer

If human capital increases with the increase in physical capital, then the marginal productivity of physical capital will not change, as both forms of capital are complementing each other. However, as the economy grows due to the increase in human and physical capital, the growth rate of the economy will depend on the saving rate, as higher saving rates will lead to higher investment and faster economic growth.

If in an Economy the Human Capital Increases with the Increase