An economy is in the steady state if
A) investment equals depreciation.
B) investment equals zero.
C) net investment equals depreciation.
D) capital grows at a constant rate.
E) there are no diminishing returns.

Question

Quizplus · Accepted Answer

In the steady state, the level of capital stock remains constant, meaning that the amount of capital stock that depreciates must be equal to the amount of investment that replaces it. Therefore, investment must equal depreciation.

An Economy Is in the Steady State If