The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state?
A) output per effective worker, capital per effective worker, real wage
B) output per worker, capital per worker, real wage
C) real rental price of capital, real wage, output per worker
D) capital-output ratio, output per worker, capital per worker

Question

Quizplus · Accepted Answer

In the Solow growth model with population growth and technological progress, output per worker, capital per worker, and the real wage all grow at the rate of technological progress in the steady state.

The Balanced Growth Property of the Solow Growth Model with Population