In a steady state, the capital stock:

Question

Quizplus · Accepted Answer

In a steady state, the capital stock neither increases nor decreases as the amount of capital invested is sufficient to maintain a constant output level. Any increase in investment will result in an increase in capital stock, causing output to rise above the steady state level, while any decrease in investment will lead to a decline in capital stock, reducing output below the steady state level. Therefore, the capital stock remains constant in a steady state.

In a Steady State, the Capital Stock