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Suppose that the rate of depreciation is 5% per year, the population growth rate is 4% per year, and the growth rate of technology is 2% per year. Then the steady-state growth rate of output is

Respuesta :

Answer: 6%

Explanation:

Given that,

Rate of depreciation = 5% per year

Population growth rate (n) = 4% per year

Growth rate of technology (g) = 2% per year

Steady state growth rate of output  = n + g

                                                           = 4% + 2%

                                                           = 6%

Therefore, the steady-state growth rate of output is 6%.

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