With steady state growth:
A)k* growth fluctuates.
B)there is absolute convergence.
C)( y/y)*= g/(1- )
D)all of the above.

Question

With steady state growth:
A)k* growth fluctuates. 
B)there is absolute convergence. 
C)( y/y)*= g/(1- ) 
D)all of the above.

Quizplus · Accepted Answer

In steady state growth, the capital per worker (k*) growth fluctuates, but in the long run, there is absolute convergence. The formula for steady state growth is (y/y)*= g/(1-d) where g is the growth rate of technology and d is the depreciation rate. Therefore, option C is the correct choice.

With Steady State Growth