The instability of equilibrium in the Harrod model was used by him to explain the business cycles above and below the trend path of --------
A)warranted (required) rate of growth
B)actual rate of growth
C)sustainable rate of growth
D)natural rate of growth

Question

Quizplus · Accepted Answer

The Harrod model explains business cycles in terms of deviations from the warranted rate of growth, which is the growth rate at which planned savings equal planned investment.

The Instability of Equilibrium in the Harrod Model Was Used