What is meant by the steady-state level of capital?
A) All of a nation's capital is reinvested back into that country.
B) Positive net capital investment continues to drive growth at a steady rate.
C) There is no new net investment, or any growth.
D) Investment eventually exceeds depreciation.

Question

Quizplus · Accepted Answer

The steady-state level of capital refers to a situation where there is no new net investment, or any growth. In this state, the level of investment is just enough to replace depreciation, and the economy reaches a state of equilibrium. Options A and B do not accurately describe the steady-state level of capital, and option D suggests that investment exceeds depreciation, which is not the case in this scenario.

What Is Meant by the Steady-State Level of Capital