In a steady state, both consumption per worker and the capital-labour ratio are constant. This is because the economy has reached a balanced state where the amount of capital matches the amount of labour, and the amount of output produced is enough to maintain a constant level of consumption per worker.

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In a Steady State

Question 27

Multiple Choice

In a steady state,

A) both consumption per worker and the capital-labour ratio are constant.
B) consumption per worker is constant,but the capital-labour ratio can change.
C) capital and labour,by definition,are inversely related to one another.
D) consumption per worker can change,but the capital-labour ratio is constant.

Correct Answer: