Steady state growth is when:
A)when the average product of capital, y/k, is unchanging as k increases at a constant rate.
B)when the rate of growth of capital per worker is constant at zero.
C)when the rate growth of output per worker is constant at zero.
D)all of the above.

Question

Quizplus · Accepted Answer

In steady state growth, the average product of capital, y/k, remains constant as capital increases at a constant rate, indicating that the output is increasing at the same rate as the capital. This implies that the rate of growth of output per worker is also constant at zero, as the growth rate of the capital per worker is equal to the growth rate of the output per worker. Option B is incorrect as it refers to the rate of growth of capital per worker, whereas steady state refers to the rate of growth of output per worker. Option C is partially correct as it refers to the rate of growth of output per worker, but it does not take into account the constant rate aspect of steady state growth.

Steady State Growth Is When