If an Economy Is in a Steady State with No

question 47

Multiple Choice

If an economy is in a steady state with no population growth or technological change and the marginal product of capital is less than the depreciation rate:

• A) the economy is following the Golden Rule.
• B) steady-state consumption per worker would be higher in a steady state with a lower saving rate.
• C) steady-state consumption per worker would be higher in a steady state with a higher saving rate.
• D) the depreciation rate should be decreased to achieve the Golden Rule level of consumption per worker.