Registered Environmental Manager (REM) Practice Exam

What defines a steady-state economy?

1. A constant population that is equal to the carrying capacity

2. A system of continuous economic growth and resource depletion

3. A scenario where savings always exceed depreciation

4. A fluctuating population dependent on external resources

The correct answer is: A constant population that is equal to the carrying capacity

A steady-state economy is defined as one that maintains a stable population and a consistent level of resource use, which is typically in balance with the Earth's ecological carrying capacity. This means that the population is constant and does not exceed the limits set by environmental resources. By aligning population levels with the carrying capacity, the economy can function sustainably, ensuring that resources are available for current and future generations without leading to depletion. In contrast, the other proposed scenarios do not represent the principles of a steady-state economy. Continuous economic growth and resource depletion would imply a dynamic system that strives to expand without regard for sustainability, which is opposite to the steady-state concept. The idea of savings always exceeding depreciation relates to financial health rather than ecological sustainability and doesn't capture the essence of a steady-state. Lastly, a fluctuating population that relies on external resources undermines the idea of stability and self-sufficiency that is fundamental to a steady-state economy, as it suggests an instability that defeats long-term sustainability.