The Steady State Is Defined as a Long-Run Equilibrium at Which

question 11

Multiple Choice

The steady state is defined as a long-run equilibrium at which capital, labor, and output all grow at the same rate.To be in a steady state in a neoclassical model, which of the following equations has to be satisfied?

• A)y = (n - d)k
• B)sy = (n + d)k
• C)sf(k) = (n - d)k
• D)sy = nk + d
• E)y = f(k)= sk + nd

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by everyone without diminishing availability to others, such as public parks and street lighting.

Price Mechanism

The system by which the prices of goods and services are determined in a free market, through the forces of supply and demand.

Government "Five-Year Plan"

A centralized and often government-enforced economic development strategy, typically aimed at rapid industrialization or development within a five-year timeframe.

"The Invisible Hand"

A term coined by Adam Smith to describe the self-regulating nature of the marketplace.