Question

3. If an economy moves from a steady state with positive population growth to a zero population growth rate, then in the new steady state, total output growth will be ______, and growth of output per person will be ______. [1 point] A) lower; lower B) lower; the same as it was before C) higher; higher tha

Answer 1

Answer: Option B

Explanation:

Positive population growth means that there is increased birth and there is no deaths in the country. To bring it to zero population growth (ZPG) there has to be no growth or decline in the population growth.

Economy is supposed to be in a steady state when there is zero population growth. Total output growth will become lower with ZPG and the growth of the output per person will remain the same as before as there is no increase in population.