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Q 7: Assume that the savings propensity is 18%, incremental capital-output ratio is 5, population growth is 3%, there is no technical progress and there are constant returns to scale.
(a) The warranted rate of growth is greater than the natural rate of growth
(b) The warranted rate of growth is lower than the natural rate of growth
(c) The economy will grow at 3% rate of growth
(d) The economy will grow at more than 3% rate of growth
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