Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that
A)S / NA = (δ + gA + gN)K / NA.
B)S / NA = (gA + gN)K / NA.
C)I / NA = (δ)K / NA.
D)I = δK.
E) none of the above

Question

Quizplus · Accepted Answer

The equation for balanced growth is S/NA = δK/NA + gAK/NA + gNK/NA, where S is savings, NA is labor, δ is depreciation, gA is the technological progress rate, gN is the population growth rate, and K is capital. The equation in choice A includes all of these factors, therefore it is the correct choice.

Assume That an Economy Experiences Both Positive Population Growth and Technological