Significance and Objectives Relationships Criticisms
100
What is the Solow-Swan model
The Harrod-Domar model was a precursor to this economic growth model.
100
What is an increased level in savings
One way to increase the rate of growth in an economy is by reducing the capital-output ratio. ___ is the other way.
100
What is lack of a sound financial system
Increased saving by households does not necessarily mean there will be greater funds available for firms to borrow to invest due to this...
200
What is the capital-output ratio, c
Quite simply, the model suggests that the economy's growth rate depends on the level of national saving and this variable.
200
What are savings and national income
OR
What are changes between capital stock and capital investment
These are one of the two relationships to economic growth.
200
What is market failure
Research and development needed to improve the capital/output ratio is often under-funded can cause this.
300
What are business cycles
The model was originally developed to analyze ___ before being adapted to economic growth.
300
What is a linear-staged growth model
Because of the simple relations between the variables, the Harrod-Domar model is considered this type of growth model.
300
What are weaknesses in human capital
Efficiency gains that reduce the capital/output ratio are difficult to achieve in developing countries due to ___.
400
What is GDP
When capital-output ratio, c, is higher, the growth rate of ___ lowers.
400
What is China
In Developing Asia and Latin America, one country was a clear outlier in terms of economic growth and investment.
400
What is foreign aid
Attempts to fill the savings gap causes external debt repayment issues.
500
What is Keynesian economics
The Harrod-Domar model is influence by this classic school of economic thought.
500
What is a high c value
In the Harrod-Domar model, this would indicate inefficient investment.
500
What is a low marginal propensity to save
The disposable income gained is often used on increased consumption rather than saved.






Harrod-Domar Model

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