Which of the following is not an assumption of Harrod’s model of growth?
A. The desired capital output ratio is constant.
B. Savings are a constant proportion of real income in the economy.
C. The labour force grows at some exogenously determined constant exponential rate.
D. Factor prices are flexible in the long run.
Answer:D
Which of the following is not an assumption of Harrod’s model of growth?
A. The desired capital output ratio is constant. B. Savings are a constant proportion of real income in the economy. C. The labour force grows at some exogenously determined constant exponential rate. D. Factor prices are flexible in the long run.