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    Question

    In the Harrod-Domar model, if the saving rate (s) is 20%

    and the capital-output ratio (v) is 2, what is the growth rate of the economy?
    A 5% Correct Answer Incorrect Answer
    B 4% Correct Answer Incorrect Answer
    C 10% Correct Answer Incorrect Answer
    D 2% Correct Answer Incorrect Answer

    Solution

    Note - g=s/v Where: g = growth rate of the economy s = saving rate v = Capital Output ratio

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