Suppose that the capital stock grows faster than the labor force, and there is no technological growth. This would causeResponsesA an upward shift of the productivity curve.an upward shift of the productivity curve.B an upward movement along the productivity curve.an upward movement along the productivity curve.C a downward shift of the productivity curve.a downward shift of the productivity curve.D a downward movement along the productivity curve.
Question
Suppose that the capital stock grows faster than the labor force, and there is no technological growth. This would causeResponsesA an upward shift of the productivity curve.an upward shift of the productivity curve.B an upward movement along the productivity curve.an upward movement along the productivity curve.C a downward shift of the productivity curve.a downward shift of the productivity curve.D a downward movement along the productivity curve.
Solution
The answer is B. An upward movement along the productivity curve.
Here's why:
The productivity curve represents the relationship between inputs (capital and labor) and output. If the capital stock grows faster than the labor force, it means that there is more capital available per worker. This would increase labor productivity, causing an upward movement along the productivity curve.
This is not a shift of the curve because there is no change in technology. A shift in the productivity curve would require a change in technology or any other factor that affects productivity for a given amount of inputs. In this case, we are simply moving along the existing curve because the ratio of inputs (capital to labor) is changing, not the underlying technology or efficiency of production.
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