In the same model, let both be positive with . In the long run the capital-labour ratio approaches
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2 marks, −0.666666666666667Economics of Growth and DevelopmentHarrod–Domar and Solow growth modelsGrowth models with labour markets and class savingsModerateabout 3 min
DSE 2015 Question 56: Harrod–Domar and Solow growth models
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In the same model, let both s_w,sᵣ be positive with s_w<sᵣ. In the long run the capital-labour ratio approaches (A) zero (B) infinity (C) [((1-α)s_w+α sᵣ)/n]^(1/(1-α)) (D) [(α s_w+(1-α)sᵣ)/n]^(1/α)
Also written as: In the same model, let both s_w,s_r be positive with s_w<s_r. In the long run the capital-labour ratio approaches
Harrod–Domar and Solow growth models has come up 113 times in 7 exams since 2006.
What this question tests
This question is on Growth models with labour markets and class savings, part of Harrod–Domar and Solow growth models in Economics of Growth and Development.
Extensions that add a labour market or let different groups save at different rates.
TestStop has 17 past-paper questions on this subtopic.
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