When a country continually adds more capital to its existing stock productivity will:

Question

Quizplus · Accepted Answer

As a country adds more capital to its existing stock, the productivity will increase at a decreasing rate because of the diminishing marginal returns. This means that each additional unit of capital will lead to a smaller increase in productivity than the previous unit. This is due to the fact that other factors such as technology and labor skills also play a role in determining productivity and cannot be improved at the same rate as capital.

When a Country Continually Adds More Capital to Its Existing