Final answer:
Capital deepening could lead to diminishing returns when using the same production methods, while (d) technological improvements typically enhance productivity and do not lead to diminished returns.
Step-by-step explanation:
Capital deepening occurs when an economy increases its level of capital per worker, which can initially lead to higher productivity. However, over time, it may result in diminishing returns if the methods of production remain the same. This is because each additional unit of capital adds less to output than the previous unit, leading to a movement along the production function curve with a decreasing slope.
On the other hand, technological improvements typically enhance productivity and lead to shifts in the production function curve upwards. This does not result in diminished returns since technology provides new methods of production making the existing capital more efficient. High-income economies often see continuous technological innovation, which counterbalances the diminishing returns to investments in physical and human capital, therefore supporting sustained productivity growth.