A Less Developed Country (LDC) has an Incremental Capital Output Ratio (ICOR) of 5 and a savings rate . If current GDP is $1000, what will be the GDP in next year?
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2 marks, −1Economics of Growth and DevelopmentHarrod–Domar and Solow growth modelsThe Harrod-Domar modelEasyabout 1 min
JNU SIS 2016 Question 16: Harrod–Domar and Solow growth models
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A Less Developed Country (LDC) has an Incremental Capital Output Ratio (ICOR) of 5 and a savings rate s = 20%. If current GDP is $1000, what will be the GDP in next year? (A) $ 1150 (B) $ 1040 (C) $ 1200 (D) $ 1030
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.
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