A steady state rate of growth of the economy will occur under less
than optimal conditions
1. if the upward shift of the investment function
due to the growth of the unrestricted capital types is equal to
the downward shift due to expansion of the restricted types.
2. if the downward shift of the investment function
due to the growth of the unrestricted capital types is equal to
the upward shift due to expansion of the restricted types.
3. only if the principle of diminishing returns
holds.
4. none of the above cases.
Choose the correct option.