Economy, asked by rammurti9533, 1 year ago

How is capital output ratio related to the warranted rate of growth?

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Answered by RiyaTembekar
0

The warranted growth rate is the growth rate at which all saving is absorbed into investment. If, for example, people save 10 percent of their income, and the economy's ratio of capital to output is four, the economy's warranted growth rate is 2.5 percent (ten divided by four).

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