COR = 5:1, Savings rate = 12.5%, Population growth rate

According to Harrod-Domar Model, Gy s. Where is output-capital ratio, s MPS Gy growth rate of output So, Gy 12.5 15 2.5

= 2.5%. Find growth rate of output.

A 2.5%

B 5%

C 3%

D 4%

E 7%

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