Practice mode Long Term Economic Growth

Neoclassical growth theory identifies the steady state as the point where ____ is just enough to keep ____ constant while the labour force grows. Which pair completes the sentence?

Correct answer D. Investment, capital per person

Explanation

In the Solow model, steady state occurs when investment exactly equips new workers with the existing capital per worker, so capital per person neither rises nor falls.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.