An implication of the Solow model is that once an economy reaches the steady state,
A) per capita consumption is constant
B) per capita output is constant, but per capita capital is not
C) per capita capital is variable
D) per capita consumption continues to grow
E) per capita consumption is growing

Question

Quizplus · Accepted Answer

In the steady state of the Solow model, per capita consumption is constant. This is because output per worker and capital per worker are both constant, meaning there is no increase in productivity or capital accumulation to drive further growth in consumption.

An Implication of the Solow Model Is That Once an Economy