Steady state growth will occur according to Robert Solow when
A)y = k.
B)y = n.
C)kn = y.
D)k = n.

Question

Quizplus · Accepted Answer

According to the Solow model, the steady state occurs when investment equals depreciation, or when the capital stock (k) is constant. The growth rate of output (y) in the steady state is determined by the exogenous rate of technological progress (n), so the correct equation is k = n. A is incorrect because it implies that output is proportional to capital, which is not the case in the Solow model. B and C are incorrect because they do not capture the relationship between capital and output in the steady state.

Steady State Growth Will Occur According to Robert Solow When