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Questions › GATE › GATE 2025 › Q60
2 marksEconomics of Growth and Development › Harrod–Domar and Solow growth models › The Harrod-Domar modelEasyabout 1 min

GATE 2025 Question 60: Harrod–Domar and Solow growth models

Consider the following Harrod-Domar growth equation

sθ=g+δ\frac{s}{\theta} = g + \deltaθs​=g+δ

where s=s=s= saving rate, θ=\theta=θ= capital-output ratio, g=g=g= overall growth rate, and δ=\delta=δ= capital depreciation rate.

If δ=0\delta=0δ=0 and s=20%s=20\%s=20%, then to achieve g=10%g=10\%g=10%, the capital-output ratio will be ______ (in integer)

Answer and worked solution

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Plain-text version

Consider the following Harrod-Domar growth equation s/θ = g + δ where s= saving rate, θ= capital-output ratio, g= overall growth rate, and δ= capital depreciation rate. If δ=0 and s=20%, then to achieve g=10%, the capital-output ratio will be (in integer)

Also written as: Consider the following Harrod-Domar growth equation s/theta = g + delta where s= saving rate, theta= capital-output ratio, g= overall growth rate, and delta= capital depreciation rate. If delta=0 and s=20%, then to achieve g=10%, the capital-output ratio will be (in integer)

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

What this question tests

This question is on The Harrod-Domar model, part of Harrod–Domar and Solow growth models in Economics of Growth and Development.

Growth driven by saving and the capital-output ratio, and why it is knife-edge.

TestStop has 27 past-paper questions on this subtopic.

Take this paper as a timed mockMore on The Harrod-Domar model

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Question from the GATE 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.