Explain how the Harrod-Domar growth model, while extremely limited, provides important insights into the growth process
What will be an ideal response?
The model focuses only on the aggregate rates of savings and investment, and requires a single, "knife-edge" equilibrium growth rate. Nevertheless the essential roles of saving and investment are worth studying for their impact on growth.
Economics
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Estimations of demand are used as input in this type of scenario:
A. understanding the demand for oil in order to impose a new oil import tax. B. understanding automobile demand to decide whether to offer below-market-rate loans for new cars. C. as input into a firm's decision-making process. D. all of the above
Economics
What factors increase potential GDP? Include a definition of potential GDP in your answer
What will be an ideal response?
Economics