In a steady-state balanced growth equilibrium,
A) the levels of the key variables are equal.
B) the levels of the key variables are equal to the rate of the growth of the key variables.
C) the capital-output ratio is constant over time.
D) the capital-output ratio is growing over time.

Question

Quizplus · Accepted Answer

In a steady-state balanced growth equilibrium, the capital-output ratio remains constant over time, indicating that capital and output are growing at the same rate.

In a Steady-State Balanced Growth Equilibrium