A balanced growth path is defined as a situation in which:

Question

Quizplus · Accepted Answer

A balanced growth path refers to a situation in which all endogenous variables grow at a constant rate. Therefore, the correct answer is D - the growth rates of all endogenous variables are constant. Option A is incorrect because a zero output growth rate does not necessarily indicate a balanced growth path. Option B is incorrect because a constant growth rate is required for a balanced growth path, not variable growth rates. Option C is also incorrect because while some endogenous variables may have constant growth rates, a balanced growth path requires all endogenous variables to have constant growth rates.

A Balanced Growth Path Is Defined as a Situation in Which