Answer :
Final answer:
Increasing the quantity of physical capital per worker, whilst keeping other factors constant, boosts productivity initially, yet leads to diminishing returns over time.
Explanation:
In the field of economics, increasing the quantity of physical capital per worker, while keeping technology and human capital constant, typically leads to an increase in overall productivity. This is simply because having additional resources, or capital, allows workers to produce more output. For example, a worker with more machinery (physical capital) can produce more units of a product compared to a worker with less machinery. However, it's important to note that there's a principle known as the law of diminishing returns, which suggests that after a point, adding more physical capital will result in smaller and smaller increases in productivity. So while initially, adding more physical capital does increase productivity, over time the effectiveness of additional capital decreases.
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