Steady-state investment per worker is positively related to the capital-labor ratio because the higher the capital-labor ratio
A)the lower the capital depreciation rate.
B)the greater the amount of resources available for capital investment.
C)the more investment per worker is required to replace depreciating capital.
D)the less the economy needs to equip new workers with the same high level of capital.

Question

Quizplus · Accepted Answer

The more investment per worker is required to replace depreciating capital because as the capital-labor ratio increases, maintaining that higher level of capital per worker necessitates more investment to counteract depreciation.

Steady-State Investment Per Worker Is Positively Related to the Capital-Labor