Question
Given the Harrod-Domar Equation g=(ks)d where s=22%,k=3 and d=3% The growth rate of this economy is currently 4.33%. If a higher growth rate was targeted,
Given the Harrod-Domar Equation g=(ks)d where s=22%,k=3 and d=3% The growth rate of this economy is currently 4.33%. If a higher growth rate was targeted, with current savings and depreciation rates unchanged, the ICOR would need to increase. One way to to accomplish this is to adopt more capital intensive production. (FALSE) 2) Because of its simplicity, the Harrod-Domar Model was not particularly influential in the evolution of thinking in the field of economic development. (FALSE) 3) With Harrod-Domar for a given depreciation rate, the only thing that matters is the proportion of income that is saved and the impact of investment on output. This represent both a necessary and sufficient condition for development. (FALSE)
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