If the population growth rate is 2%,the incremental capital output ratio is 3,the saving ratio is 24% and the depreciation rate is 5%,the rate of growth of income per person is

Question

Quizplus · Accepted Answer

The rate of growth of income per person can be calculated using the modified Harrod-Domar model, which is given by the formula: (s/v) - (n + d), where s is the saving ratio, v is the incremental capital output ratio, n is the population growth rate, and d is the depreciation rate. Plugging in the given values: (0.24 / 3) - (0.02 + 0.05) = 0.08 - 0.07 = 0.01 or 1%.

If the Population Growth Rate Is 2%,the Incremental Capital Output