True or False?
The statement is true. When growth is at a steady state rate it is constant. This means that the investment function is stationary (that is not shifting) in the face of growth of both the restricted and unrestricted forms of capital. When the savings and investment functions are both stationary, the investment to income ratio and the real rate of interest will both be constant. It is possible, of course, for the steady state rate of growth to be zero, in which case the real interest rate will equal the intersection of the savings function with the vertical axis and both investment and savings will be zero.