For an economy long run rate of growth of GDP is 5% per annum,investment rate is 20% and rate of growth of lab?
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THE QUESTION IS....for an economy long run rate of growth of GDP is 5% per annum,investment rate is 20% and rate of growth of labour force is 2%. Then capital-output ratio is? pls reply asap
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Answer:
I'm not sure, but if capital increases by 20% and GDP by 5% then I'd imagine that the capital-output ratio would be 20% : 5% , or 4:1.
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