Answer to Question #64316 in Microeconomics for niharika

Question

differentiate between a) Harrod neutrality and Hicks neutrality

Answer 1

Exogenous technical progress is called neutral if it does not alter the functional distribution of national income. The following types of neutral technical progress.
Hicks neutrality is achieved by the fact that it does not change the investment nor labor nor value limit inputs.
Harrod neutrality is provided by the fact that the development of technical progress every capital value of average performance meets the constant marginal productivity.