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The Harrod-Domar Model Predicts That If the Saving Rate Is

Question 41

Multiple Choice

The Harrod-Domar model predicts that if the saving rate is 20% and the capital output ratio is a constant equal to 5, then the economy will grow at a rate of:


A) 2%
B) 5%
C) 10%
D) 20%
E) None of the above.

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