Does Capital Intensive Technology Is In Favor Of UDCs?
Biggest advantage of KIT is this that it leads to generate economic surplus in the country. It means that because of application of this technology the output and employment are not maximized, but the output and saving are maximized. Accordingly, the share of profits in the distribution saving are maximized. Accordingly, the share of profits in the distribution of NI rises. The planners and economists agree that MPS out of profits is greater than MPS out of wages. Thus, the technology which creates surplus will helpful in boosting the output and employment in future. In case of poor countries, the birth rate is very high. Accordingly, how long the capital labor ratio is not enhanced; the output would fail to increase. Therefore, for the sake of yielding a greater output, more capital will be required with ever-rising population in LDCs. The KIT becomes helpful in raising the productivity of labor; the economies of scale are attained; costs of production are decreased and; the domestic
