A steady state is a situation in which the key variables in the model
A)are constant or else growing at a constant rate.
B)are growing at a decreasing rate.
C)are endogenous.
D)measure zero.

Question

Quizplus · Accepted Answer

In a steady state, the key variables are constant or growing at a constant rate. This means that there is no change in the long run and the system has reached a point of equilibrium. Option B is incorrect as a decreasing rate of growth would imply that the system is not in a steady state. Option C is incorrect as endogeneity refers to the relationship between variables, not their stability. Option D is incorrect as the size of the variables is not relevant to whether the system is in a steady state or not.

A Steady State Is a Situation in Which the Key