Re: Points of discontinuity (holes and vertical asymtotes)

Posted by Vidhya on Dec 16, 2017; 4:14pm
URL: http://discussion-forum.276.s1.nabble.com/Points-of-discontinuity-holes-and-vertical-asymtotes-tp7608497p7608514.html

Can you please confirm if this is the right way to solve this:

For an economy , the long run rate of growth of GDP is 5% at full employment . The inv. rate is 20% and the rate of growth of labour force is 2%.then the capital output ratio is
a:2
b:5
c:7
d:10
The answer is 10. Should we use natural rate of growth here (which is equal to growth rate of labour 2%) and then using gn = s/theta (2% = 20%/theta)to get theta = 10.