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What is the defining characteristic of a steady state in macroeconomics?

A. Consistent rates of growth year - over - year
B. Constant values of economic variables even as change occurs
C. Regular adjustments in monetary policy
D. Balanced trade with no surplus or deficit

User Schmidko
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Final answer:

The defining characteristic of a steady state in macroeconomics is the maintenance of constant values of economic variables despite changes that may occur.

Step-by-step explanation:

The defining characteristic of a steady state in macroeconomics is B. Constant values of economic variables even as change occurs. This concept implies that the economy has reached a balance where economic variables such as GDP, employment rates, and price levels are not changing significantly over time. In a steady state economy, the focus shifts from continual growth to sustainable development, reflecting concerns about the long-term impact of expansion on the environment and society.

Steady state economics aims to maintain stability by meeting three major measures of economic well-being: consistent economic growth, low and consistent unemployment rates, and stable price levels. A steady state does not primarily focus on balanced trade or regular adjustments in monetary policy, although these can contribute to economic stability.

A notable economist, Milton Friedman, argued in favor of steady growth in the money supply to match the growth of the real economy and prevent monetary policy from being a source of economic disturbance. His views align with the principles of steady state economics but emphasize monetary policy over broader economic measures

User Cuongle
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