For an economy in which there is no technological progress, explain what must occur for the steady state to occur. Also explain what this implies about the rate of growth of output, output per worker, and the capital stock
What will be an ideal response?
The steady occurs when the economy is in equilibrium. Specifically, the steady state refers to the situation where K/N and Y/N are constant. K/N will not change when investment per worker equals depreciation per worker. During the adjustment process, the growth rates of Y, Y/N, and K/N will all be negative. Once the steady state is reached, these variables are constant and the growth rates will be zero.
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"When the cost of producing a unit of a good falls as its output rate increases" is the definition of
A) economies of scope. B) economies of scale. C) economic efficiency. D) technological efficiency.
If quantity demanded is greater than quantity supplied, the market price must be
a. above equilibrium. b. at equilibrium. c. below equilibrium. d. above cost of production.