In the absence of technological progress,we know that the level of output per worker in the steady state will
A)increase over time.
B)remain constant.
C)decrease as a result of decreasing returns to scale.
D)increase or decrease, depending on the rate of saving.
E) increase or decrease, depending on the rate of depreciation.

Question

Quizplus · Accepted Answer

In the absence of technological progress, the level of output per worker in the steady state will remain constant. This is because as the economy approaches the steady state, the capital stock accumulates to the point where the diminishing returns to capital offset the benefits of additional accumulation, resulting in a constant level of output per worker.

In the Absence of Technological Progress,we Know That the Level