Consider the Harrod-Domar model given by the following equations .
S(t) = 0.3 Y(t)
I(t) = Ḱ(t) = 0.7 Ẏ (t)
S(t) = I(t)
a)Write the significance of each variable and constant of the model.Â
b) Give the economic interpretation of the model.
c) If Y0 = 100 m.u., compute the income, the savings and the investment trajectories.Â
d) Determine the equilibrium points of these trajectories and analyze their stability.
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