In the Solow model, with population growth:
A) there is no steady state in output per person
B) the economy never settles down to a steady state and exhibits growth in output per person
C) the economy eventually settles down to a steady state in output per person
D) the economy eventually settles down to a steady state with no growth in aggregate output
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

The Solow model predicts that, with population growth, the economy will eventually settle down to a steady state level of output per person. In this steady state, aggregate output will continue to grow at the same rate as population, but output per person will remain constant.

In the Solow Model, with Population Growth