Answer to Question #169954 in Economics for Lakhan mali

Question

. In Harrod Domar model, suppose the savings rate is 20% and capital output is 4. The

population rate of growth is 4%. What is going to be the growth path of this economy?

Explain

Answer 1

If the savings rate is 20% and capital output is 4, then the growth path of this economy is G = s/C = 20/4 = 5%.