In a steady state, the capital stock
A) increases.
B) decreases.
C) remains constant.
D) becomes unimportant.

Name: In a steady state, the capital stock A) increases. B) decreases. C) remains constant. D) becomes unimportant.
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Question

Quizplus · Accepted Answer

In a steady state, the capital stock remains constant. This is because the economy is producing enough new capital to replace the depreciated capital, but not enough to increase the overall stock. Therefore, there is no net change in the capital stock over time.

In a Steady State, the Capital Stock