1. Predict the effect of each of the following events on the growth rate of productivity.
The amounts of physical and human capital per worker are unchanged, but there is significant technological progress.
Significant technological progress will result in a positive growth rate of productivity even though physical capital per worker and human capital per worker are unchanged.
The amount of physical capital per worker grows at a steady pace, but the level of human capital per worker and technology are unchanged.
The growth rate of productivity will fall but remain positive due to diminishing returns to physical capital.