Which of the following is always true after an economy reaches a balanced growth equilibrium?
A) The growth rate of output equals the rate of depreciation.
B) The growth rate of capital is equal to the savings rate.
C) The growth rate of capital is equal to the growth rate of the effective workforce.
D) Population growth is zero.
E) The growth rate of output equals the rate of saving.

Question

Quizplus · Accepted Answer

In a balanced growth equilibrium, the growth rate of capital must equal the growth rate of the effective workforce to maintain equilibrium. This ensures that the ratio of capital to effective labor remains constant over time, allowing for sustained economic growth without imbalances between the supply of capital and labor.

Which of the Following Is Always True After an Economy