In the Lewis two-sector model, a crucial assumption is that ?

In the static Keynesian model, temporary gap between I and S are compensated through the automatic adjustment guaranteed by multiplier effect. Instead , according to Harrod, if the overall productivity growth rate does not increase enough, what happens? Write the equation for the simplified Harrod -Domar model According to the Harrod-Domar model , rate of economic growth depends on two factors. Describe them. Discuss the main factors that affect economic growth. Discuss the concept of warranted growth rate as introduced by Roy Harrod. Describe the criticisms of the Harrod- Domar Model.(a) (3 points) Explain how each of the following risks may affect an individual's retirement income from a defined contribution pension plan: (i) Subpar investment growth (ii) Market risk (iii) Inflation risk (iv) Increasing longevity (b) (4 points) Describe four characteristics of an ideal secure income solution that could be incorporated into a target date fund glide path to improve the income security of a defined contribution plan member during the payout phase.(9 points) You are given the following key rate durations for a 9% non-callable bond: Key rate duration 0.25 0.03 0. 1 2 0.1 3 0.3 5 0.5 7 0.8 10 X 15 1.7 20 1.5 25 1.3 30 3.1 You are also given the following for the bond: Price $102.00 Effective duration 10.83 (a) (2 points) Calculate the change in the key rate at year 10 which results in a price of $102.60. (b) (4 points) Describe in words how the effective duration and key rate durations would change if: (i) A sinking fund was added to the bond; (ii) A European put option was added to the bond; or (iii) The bond was a 10% callable bond. (c) (3 points) Describe three fixed income strategies that could be used to diversify and reduce the interest-rate sensitivity of a bond portfolio within a defined contribution plan target date fund.(7 points) You are given the following excerpt of the Investment Policy Statement for the ABC Investment Group Retirement Savings Plan: Plan Sponsor ABC Investment Group, a private company Plan Type Defined Contribution Trustee CEO of ABC Investment Group Investment Manager CFO of ABC Investment Group Asset Classes Represented | Common Stocks, Real Estate, Cash Fund Options / ABC Investment Group Large-Cap Value Management Expense Index / 1.25% per year Ratio (MER) ABC Investment Group Raw Land REIT / 2.00% per year ABC Investment Group Money Market Fund /0.25% per year Frequency of allowed Semi-Annually (June 30, December 31) investment allocation changes Default Investment Option | ABC Investment Group Large-Cap Value Index Critique the policies outlined above with respect to ABC Investment Group's fiduciary obligations