When the capital-output ratio is at its steady state value, output per worker is growing
A) at the same rate as the growth of the capital stock..
B) at the capital stock depreciation rate.
C) at the growth rate in the efficiency of labor.
D) at the savings rate.

Question

Quizplus · Accepted Answer

In the steady state, output per worker grows at the rate of technological progress or the growth rate in the efficiency of labor, as this is what drives long-term growth in models like the Solow growth model.

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