An increase in the quality of capital is a result of A) population growth.B) disembodied technical change.C) embodied technical change.D) an increase in the labor force.
Answer is B. Disembodied technical change.
Disembodied technical progress means existing instrument are
improved and productivity increased. In this there is no new
investment. So here quality of capital increases because already
installed machines are got improved.
In embodied technical progress new invention takes place and old
machines or technology is replaced with new one. So in this capital
got changed and quality of capital does not change.
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