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The substitution of steel for wooden ploughs in agricultural production is an example of

The substitution of steel for wooden ploughs in agricultural production is an example of

(a)

labour-augmenting technological progress

(b)

capital-augmenting technological progress

(c)

capital-reducing technological progress

(d)

None of the above

Answer:

(b)

Non-traditional

Explanation

“Capital” in an economic context means machinery or capital goods which can be employed to produce other goods. Substitution of steel can be considered as the substitution of a lesser machine by a better machine. This encourages steel production. Hence it is a capital-augmenting technological progress.Tikdam: clearly labour reducing so capital augmenting