Diminishing returns to physical capital implies that, when the human capital per worker and the state of technology remain fixed, each successive increase in physical capital leads to productivity. a larger increase in a decrease in negative a smaller increase in 11. (Problem 11) Why would you expect real GDP per capita in California and Pennsylvania to exhibit convergence but not in California and Baja California, a state of Mexico that borders the United States? Consider what changes would allow California and Baja California to converge, then determine which of the following best describes the correct answer. According to the conditional convergence hypothesis, you should not expect real GDP per capita in California and Pennsylvania to converge. It is more likely that the factors that affect growth will be equal in California and Pennsylvania but not equal between California and Baja California. According to the conditional convergence hypothesis, you should expect real GDP per capita in California and Baja California to converge. 12. If real GDP doubles in 12 years, its average annual growth rate is approximately: 4%. 5%. 3%. 6%.