If a country is at its steady-state level of capital stock, which of the following will NOT result in economic growth in future years, ceteris paribus?
A) a technological advancement
B) an increase in the savings rate
C) producing capital at its current rate
D) a decrease in the depreciation rate

Question

Quizplus · Accepted Answer

If a country is already at its steady-state level of the capital stock, producing capital at its current rate will not result in economic growth in future years. In order to achieve economic growth, the country needs to either increase its savings rate, adopt new technologies or decrease the rate of depreciation of capital.

If a Country Is at Its Steady-State Level of Capital