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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.
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optimal use of variable input
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