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Questions › IIT JAM › IIT JAM 2026 › Q59
2 marksEconomics of Growth and Development › Harrod–Domar and Solow growth models › The Solow model and its steady stateHardabout 3 min

IIT JAM 2026 Question 59: Harrod–Domar and Solow growth models

Consider a Solow model with production Y=KαL1−αY=K^{\alpha}L^{1-\alpha}Y=KαL1−α, where YYY, KKK and LLL are output, capital and labour, and α\alphaα is a positive constant. The savings rate, depreciation rate, and labour growth rates are 20%, 7%, and 3%. If α=0.5\alpha=0.5α=0.5, then the steady-state capital-labour ratio is ________ (in integer).

Answer and worked solution

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Plain-text version

Consider a Solow model with production Y=K^αL^(1-α), where Y, K and L are output, capital and labour, and α is a positive constant. The savings rate, depreciation rate, and labour growth rates are 20%, 7%, and 3%. If α=0.5, then the steady-state capital-labour ratio is (*in integer*).

Also written as: Consider a Solow model with production Y=K^(alpha)L^(1-alpha), where Y, K and L are output, capital and labour, and alpha is a positive constant. The savings rate, depreciation rate, and labour growth rates are 20%, 7%, and 3%. If alpha=0.5, then the steady-state capital-labour ratio is (*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 Solow model and its steady state, part of Harrod–Domar and Solow growth models in Economics of Growth and Development.

Growth with substitutable factors: capital per worker settles where saving covers depreciation and dilution.

TestStop has 38 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2022 · Q14An economy follows the Solow model with production function y = √k, where y is output per worker and k is…
Take this paper as a timed mockMore on The Solow model and its steady state

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