Suppose the following situation exists for an economy: Kt₊₁ / N = Kt / N.Given this information,we know with certainty that
A)the economy is operating at the golden rule equilibrium in period t.
B)saving per worker is less than depreciation per worker in period t.
C)saving per worker is greater than depreciation per worker in period t.
D)investment per worker equals depreciation per worker in period t.

Question

Quizplus · Accepted Answer

The equation Kt₊₁ / N = Kt / N indicates that the capital per worker in the next period (t+1) is equal to the capital per worker in the current period (t). This implies that the amount of investment per worker is exactly offsetting the amount of depreciation per worker, keeping the capital per worker constant over time.

Suppose the Following Situation Exists for an Economy: Kt₊₁