Consider a simplified RBC model. Production purely depends on the level of capital:Yt = F(Kt) = (1 + γ)Kt, where γ is a constant. There is no taxation (Yt = P rSt + Ct)and no government spending (Gt = 0). Assume that autonomous consumption is zero, so the consumption is proportional to output: Ct = bYt, where b is the marginal propensity to consume. Which of the following parameter specifications has to be true in order to have positive growth in the level of output?
A. γ > 0.
B. (1 - b)(1 + γ) > δ
C. b + δ + γ > 0
D. (1 - b)γ > b.