Using the Harrod-Domar Growth Model,suppose One Economy Has to Maintain

question 2

Multiple Choice

Using the Harrod-Domar growth model,suppose one economy has to maintain a growth rate of GDP of 10 percent per year in order to avoid a decline in the average standard of living.Assume in this economy,the capital-output ratio v is 3 and the depreciation rate d is 5%,what is the required saving rate?

• A) 5 percent.
• B) 15 percent.
• C) 30 percent.
• D) 45 percent.

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Definitions:

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.

Private Behaviors

Actions that individuals engage in away from the public eye or scrutiny, reflecting personal preferences or desires.

Consistency

The quality of always behaving or performing in a similar way, or the quality of being logical and containing no contradictions.

Three Components

Constituent parts or aspects that together form a whole, often referenced in models or theories to explain complex phenomena.