If we have an aggregate production function of the form Y = aK, at what capital-labor ratio can a steady-state equilibrium be reached?
A)k = sa - (n + d)
B)k = sa + (n - d)
C)k = sa/(n + d)
D)k = ay/(n + d)
E)never

Question

Quizplus · Accepted Answer

In the given production function Y = aK, output depends only on capital, not on labor. Therefore, a steady-state equilibrium in terms of a capital-labor ratio cannot be reached because labor is not a factor in the production function.

If We Have an Aggregate Production Function of the Form