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Business, 27.02.2020 22:58 Cjohnston742

Imagine a Harrod-Domar setup. Suppose that in 2014 Acirema the capital-output ratio (v) is 5, and the savings rate (s) is 21%. Depreciation is 1.5%. Furthermore, GDP in 2014 in Acirema is $12 billion, and population is 15 million, which represents a 2% increase in population.1) What will be the growth rate of GDP?2) How long would it take Acirema to double its GDP?3) What can you say about the LEVEL and the GROWTH rate of the standard of living in Acirema?4) Would the growth rate you found in (1) be enough to ensure development? Explain.5) Is Acirema a high income, middle income or low income country?

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