Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › DSE › DSE 2019 › Q46
0 marksEconomics of Growth and Development › Harrod–Domar and Solow growth models › Transitional dynamics, stability and convergenceHardabout 3 min

DSE 2019 Question 46: Harrod–Domar and Solow growth models

Suppose that in the Solow Model of an economy with some positive savings rate, population growth rate, and rate of depreciation, k∗k^*k∗ is the steady state capital-labour ratio. Suppose k1k_1k1​ and k2k_2k2​ are capital-labour ratios such that k1<k2<k∗k_1<k_2<k^*k1​<k2​<k∗, and let g1,g2g_1,g_2g1​,g2​ be the growth rates of per capita output at k1k_1k1​ and k2k_2k2​ respectively. Then:

Tap an option to check your answer.

Answer and worked solution

Checking your account…

Plain-text version

Suppose that in the Solow Model of an economy with some positive savings rate, population growth rate, and rate of depreciation, k* is the steady state capital-labour ratio. Suppose k₁ and k₂ are capital-labour ratios such that k₁<k₂<k*, and let g₁,g₂ be the growth rates of per capita output at k₁ and k₂ respectively. Then: (A) None of the above (B) g₁<g₂ (C) g₁=g₂ (D) g₁>g₂

Also written as: Suppose that in the Solow Model of an economy with some positive savings rate, population growth rate, and rate of depreciation, k* is the steady state capital-labour ratio. Suppose k_1 and k_2 are capital-labour ratios such that k_1<k_2<k*, and let g_1,g_2 be the growth rates of per capita output at k_1 and k_2 respectively. Then:

Harrod–Domar and Solow growth models has come up 113 times in 7 exams since 2006.

What this question tests

This question is on Transitional dynamics, stability and convergence, part of Harrod–Domar and Solow growth models in Economics of Growth and Development.

How an economy moves to its steady state and whether poor countries catch up.

TestStop has 5 past-paper questions on this subtopic.

Practise Harrod–Domar and Solow growth modelsMore on Transitional dynamics, stability and convergence

Similar questions from other papers

  • CUET-PG 2026 · Q69Match the LIST-I with LIST-II. List I A. Harrod-Domer Model B. Solow Model C. Golden rule of capital stock D. Steady state. List II I. g=s/v II. MRK = ∂ III. k…
  • GATE 2026 · Q50Consider a Solow growth model with the production function Yₜ=Kₜ^α Nₜ^(1-α); 0<α<1; where, Yₜ is aggregate output at time t; Kₜ is aggregate capital stock at time t; Nₜ…
  • IIT JAM 2026 · Q57For a closed economy: Sₜ=aYₜ and Iₜ=g(Yₜ-Yₜ₋₁), where Sₜ, Yₜ and Iₜ are savings, income and investment in period t, and a and g are positive constants. For Y₀=100…
  • UGC-NET 2026 · Q3Which of the following assumption is NOT similar in Harrod and Domar Model?
  • CUET-PG 2025 · Q17Which of the following is not correct about the steady state equilibrium for the economy according to neoclassical growth theory?

Question from the DSE 2019 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.