When the capital-output ratio is at its steady state value
A) the growth rates of capital per worker and output per worker are increasing.
B) the growth rates of capital per worker and output per worker are also stable.
C) the growth rates of capital per worker and output per worker are decreasing.
D) the growth rate of capital per worker is increasing and that of output per worker is decreasing.

Question

Quizplus · Accepted Answer

When the capital-output ratio is at its steady state value, it implies that the economy has reached a point where the growth rates of capital per worker and output per worker are stable, indicating a balanced growth path.

When the Capital-Output Ratio Is at Its Steady State Value