If an economy moves from a steady state with positive population growth to a zero population growth rate, then in the new steady state, total output growth will be ______ and growth of output per person will be ______.

Question

Quizplus · Accepted Answer

In a steady state with positive population growth, total output grows due to the increase in the number of workers, but output per person remains constant. When the population growth rate becomes zero, there will be no increase in the number of workers, so total output growth will also become zero. However, output per person will continue to grow at the same rate as before, assuming that there is still technological progress and capital accumulation. Therefore, the correct answer is (B) lower; the same as it was before.

If an Economy Moves from a Steady State with Positive