In the Solow model,with population growth,
A)there is no steady state in output per person.
B)the economy never settles down to a steady state with no growth in output per person.
C)the economy eventually settles down to a steady state with no growth in output per person.
D)the economy eventually settles down to a steady state with no growth in aggregate output.
E)None of the above is correct.

Question

Quizplus · Accepted Answer

In the Solow model with population growth, the economy eventually settles down to a steady state with no growth in output per person. In this steady state, the growth rate of population offsets the growth in capital per worker, resulting in a constant level of output per person. Therefore, the answer is C.

In the Solow Model,with Population Growth