China invests almost 50 percent of its annual production in new capital compared to 15 percent in the United States. Capital per hour of labor in China is about 25 percent of that in the United States. Explain which economy has the higher real GDP per hour of labor, has the faster growth rate of labor productivity, and experiences the more severe diminishing returns.

Use the following information to work Problems 8, 9, and 10.

dear silicon Valley: Forget flying cars, give us economic growth We have made enormous advances in computing technology. In Silicon Valley at Alphabet’s X labs, people are working on transformative technologies that include driverless cars, high­altitude balloons that deliver the Internet to remote regions of the world, self­navigating drones, and flying wind turbines tethered to a ground station. But despite today’s advances in technology, our economic growth rate has slowed.

Source: MIT Technology Review, June 21, 2016