Podcast
Questions and Answers
What is the main focus of Harrod's model?
What is the main focus of Harrod's model?
Harrod's model focuses on how steady growth and full employment can be achieved in an economy.
What are the three distinct rates of growth in Harrod's model?
What are the three distinct rates of growth in Harrod's model?
The three rates are: 1) Actual growth rate (G), 2) Warranted growth rate (Gw), and 3) Natural growth rate (Gn).
What is the warranted growth rate (Gw) in Harrod's model?
What is the warranted growth rate (Gw) in Harrod's model?
The warranted growth rate (Gw) is the full capacity growth rate of income of an economy.
What does the natural growth rate (Gn) represent in Harrod's model?
What does the natural growth rate (Gn) represent in Harrod's model?
Signup and view all the answers
What is one of the assumptions of Harrod's model?
What is one of the assumptions of Harrod's model?
Signup and view all the answers
How does Harrod's model integrate the theories of 'multiplier' and 'accelerator'?
How does Harrod's model integrate the theories of 'multiplier' and 'accelerator'?
Signup and view all the answers
What is the fundamental equation for actual growth rate (G) according to the text?
What is the fundamental equation for actual growth rate (G) according to the text?
Signup and view all the answers
What is the warranted growth rate (G_w) and how is it defined?
What is the warranted growth rate (G_w) and how is it defined?
Signup and view all the answers
What is the equation for the warranted growth rate (G_w)?
What is the equation for the warranted growth rate (G_w)?
Signup and view all the answers
What condition must be satisfied for an economy to achieve stable growth according to the text?
What condition must be satisfied for an economy to achieve stable growth according to the text?
Signup and view all the answers
What is the natural rate of growth according to Harrod?
What is the natural rate of growth according to Harrod?
Signup and view all the answers
What is the relationship between the warranted growth rate (G_w), the average propensity to save (s), and the capital-output ratio (C_r)?
What is the relationship between the warranted growth rate (G_w), the average propensity to save (s), and the capital-output ratio (C_r)?
Signup and view all the answers