Assume that an economy experiences both positive population growth and technological progress. In this economy, which of the following is constant when balanced growth is achieved?
A) S.
B) K/AN.
C) I.
D) Y/N.
E) N.

Question

Quizplus · Accepted Answer

When an economy experiences balanced growth, the capital stock and labor force will grow at the same rate as the population, resulting in a constant value for K/AN (capital per worker). S (savings rate), I (investment rate), and Y/N (output per worker) are not necessarily constant as they can be influenced by various factors such as changes in policies, technology, and institutions. N (population) will be growing over time due to positive population growth.

Assume That an Economy Experiences Both Positive Population Growth and Technological