With steady state growth:
A)the optimal output per worker grows faster than the optimal capital per worker.
B)the steady state growth rate of real GDP per worker is greater than the rate of technological progress.
C)the average product of capital is falling.
D)all of the above.

Question

Quizplus · Accepted Answer

In steady state growth, the optimal output per worker and the optimal capital per worker grow at the same rate, so (A) is not correct. However, the steady state growth rate of real GDP per worker is equal to the rate of technological progress, not greater than it, so (B) is incorrect. The average product of capital is also constant in steady state growth, not falling, so (C) is also incorrect.

With Steady State Growth