- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 9. Economic Growth
- Subject 3. Production Function and Growth Accounting
CFA Practice Question
Capital deepening occurs:
B. when the growth rate of capital exceeds the growth rate of labor.
C. when the total factor productivity increases.
A. whenever capital increases in production.
B. when the growth rate of capital exceeds the growth rate of labor.
C. when the total factor productivity increases.
Correct Answer: B
It is a relative concept - it is an increase in the capital-to-labor ratio.
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