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    Question

    According to the Harrod - Domar growth model, the GDP is

    ___
    A Inversely proportional to the capital output ratio Correct Answer Incorrect Answer
    B Directly proportional to the capital output ratio Correct Answer Incorrect Answer
    C Independent of the capital-output ratio Correct Answer Incorrect Answer
    D Inversely proportional to the Savings ratio Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Harrod-Domar Growth Model :Harrod-Domar Growth Model suggests that the economy’s rate of growth depends on:  The level of national saving (S)  The productivity of capital investment (this is known as the capital-output ratio)

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