Question
In the Harrod-Domar Model, if the savings rate (s) is
25% and the capital-output ratio (v) is 5, what is the warranted growth rate of the economy?Solution
According to the Harrod-Domar growth model, the rate of economic growth is directly proportional to the savings rate and inversely proportional to the capital-output ratio. The formula is g = s / v. By substituting the given values: g = 25 / 5 = 5. Therefore, the economy will grow at a rate of 5%. This reflects the idea that higher savings lead to more investment, but the efficiency of that investment (determined by the capital-output ratio) dictates the final growth output.
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Which of the following is the fifth sentence of the passage?
In each question below, a sentence is given with an idiom/phrase printed in bold type. That part may contain a grammatical error. Each sentence is follo...
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In Each question below has a sentence with five highlighted words that are jumbled. You need to rearrange them in the correct order to make a coherent s...
In Each question below has a sentence with five highlighted words that are jumbled. You need to rearrange them in the correct order to make a coherent s...
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P. It’s true I built this wall and it was no good.
Q. But...
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Select the option that arranges sentences A, B, C and D in a logical sequence.
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