Q. 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
Notes:

Labor augmenting is technology that increases skills and productivity of existing labor force (example – teaching people how to use the computer). Capital augmenting technology increases productivity of existing capital goods. In this case, replacement of wooden by steel increases the productivity of plough.

Source: CSP, 2015

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