UPSC Prelims 2015 – Question 90

90.The Substitution of steel for wooden ploughs in
agricultural production is an example of

1. a) labour-augmenting technological progress
2. b) capital-augmenting technological progress
3. c) capital-reducing technological progress
4. d) None of the above

The correct answer is Option 2. 

• Capital  
  • It refers to capital goods such as manufacturing plants, machinery, tools, or any equipment that can be used to produce other goods. 
  • The substitution of steel for wooden ploughs in agricultural production increases productivity thereby encouraging steel production. 
    • Therefore, it is capital-augmenting technological progress. Hence, Option 2 is correct. 

• Labour-augmenting 
  • It is the technology that increases the skills and productivity of the existing labour. 

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