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What are Harrod-Domar predictions?
The economy is rate of growth, its predictions depends onto:
• Capital formation and accumulation and capital output is the critical to development.
• Specified rate of economic growth = s/k and here k is fixed, govt can find out savings ratio needed for specified growth rate.
• The level and rate of savings is the bases and can be manipulated through government intervention.
Why are countries that let people respond to the inborn profit motive better off than those countries that do not?
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