The idea of a steady state is that
A)the capital-labor ratio grows at a constant rate
B)output per capita grows at a constant rate
C)output, capital, and labor all grow at the same rate
D)an increase in the savings rate will not affect the capital-labor ratio
E)real output cannot grow

Question

Quizplus · Accepted Answer

In a steady state, output, capital, and labor all grow at the same rate, meaning that per capita measures and ratios like the capital-labor ratio remain constant over time.

The Idea of a Steady State Is That