A labor-augmenting technological change has no effect upon the

Solution

In the Solow model with labor-augmenting technological progress, technology is incorporated into effective labor (AL). The production function is expressed in terms of the capital-effective labor ratio k=K/(AL), whose functional relationship remains unchanged by labor-augmenting technical progress. Hence, labor-augmenting technological change has no direct effect on the capital-effective labor ratio.A labor-augmenting technological change does not directly affect the depreciation investment line. The depreciation line depends on the rate of capital depreciation and the amount of capital, not on labor productivity.