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

Question

Quizplus · Accepted Answer

In a steady state, both consumption per worker (representing output per worker) and the capital-labor ratio are constant. This is because the economy has reached a balanced state where the production function is maximized, and any change in one of these variables would cause a deviation from the steady state. Therefore, only choice A describes a steady state accurately.

In a Steady State