Suppose the following situation exists for an economy: Kt+1/N = Kt/N. Given this information, we know that:
A) saving per worker is greater than depreciation per worker in period t.
B) the saving rate fell in period t.
C) saving per worker is less than depreciation per worker in period t.
D) saving state consumption is equal to the golden rule level of steady state consumption.
E) saving per worker equals depreciation per worker in period t.

Question

Quizplus · Accepted Answer

The equation Kt+1/N = Kt/N indicates that the capital per worker in the next period (t+1) is equal to the capital per worker in the current period (t), suggesting that the economy is in a steady state. In a steady state, saving per worker equals depreciation per worker, ensuring that the capital stock per worker remains constant over time.

Suppose the Following Situation Exists for an Economy: Kt+1/N =