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6. In a Harrod-Domar One Sector model, equilibrium level of income is determined at the equality of saving and investment S = I. An economy
6. In a Harrod-Domar One Sector model, equilibrium level of income is determined at the equality of saving and investment S = I. An economy has accumulation of capital between t and t+1 which is given by: IK+1-K, where I = investment in t It produces one good Q with capital K through a production function Q, bk, where b = constant productivity of capital (ratio between output and capital). While saving can be represented as a certain proportion of production function (S, = sQ). [0
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