If the steady-state capital-labor ratio is equal to the Golden Rule capital-labor ratio,then in the steady state
A)output per worker equals investment per worker.
B)output per worker equals depreciation per worker.
C)investment per worker is as large as possible.
D)consumption per worker is as large as possible.

Question

Quizplus · Accepted Answer

The Golden Rule capital-labor ratio is the level of capital accumulation that maximizes steady-state consumption per worker. Therefore, if the steady-state capital-labor ratio equals the Golden Rule capital-labor ratio, consumption per worker is as large as possible.

If the Steady-State Capital-Labor Ratio Is Equal to the Golden