If Productivity Is Growing at Some Sustained Rate G,then Output

question 62

Multiple Choice

If productivity is growing at some sustained rate g,then output and capital per worker ________.

• A)are growing at the same rate g,in a stable steady state
• B)are growing faster than g,because improving technology encourages a higher rate of saving and investment
• C)are growing slower than g,because some of the new capital is merely replacing obsolete capital
• D)are growing faster than g,because productivity does not suffer from diminishing marginal product