Harrod-Domar model

[nishtha92]

[Dr. Strange]

My answer is 6.5%

Given K/Y=3

3 UNITS OF K GIVE  1 UNIT OF Y
1 UNIT OF K GIVES  1/3 UNITS OF Y

however  1/4 of capital is wasted

So 1 UNIT OF K GIVES 1/4 UNITS OF Y(as 1/4 unit is wasted and rest 3/4 units give 1/4 units of Y)

So actual  K/Y = 4

Given, s=0.3 and we found k=4

 DELTA Y/Y=s/k =0.075=7.5 %

population growth rate =1%

y=Y/N

So delta y/y =(7.5-1)%
                    =6.5%

Do confirm the answer please.