Discussion
Which of the following is not true about the steady state growth path ?
Answer: A
The statement that is not true is The capital stock grows faster than GDP.
On a steady-state growth path, as in the Solow model, all the main aggregates grow at the same constant rate. Output and capital grow together, so the capital-output ratio stays constant, and investment and consumption remain constant shares of GDP.
If capital grew faster than GDP, the capital-output ratio would rise, which contradicts the steady state. The other three statements are the defining features of the steady state.
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