Question

What is the difference between the growth rate of the economy and the guaranteed growth rate...

What is the difference between the growth rate of the economy and the guaranteed growth rate at Harrod-Domar?

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Answer #2

The growth rate of the economy is the percentage change in the value of all goods and services produced n an economy during a particluar period of time in comparison to the previous period of time.The growth rate measures the change in a nation's GDP.Within the Harrod Domar model , it is possible to have a steady growth.The growth rate 0/x is called the warranted rate of growth.This result is obtained with the assumption of a constant marginal propensity to save and a constant capital output ratio.

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