Question

II- PROBLEMS PROBLEM 1 In Indonesia during the 1970s the incremental capital-output ratio (ICOR) averaged 2.50 . a. Using the Harrod-Domar growth equation, what saving rate would have been required for Indonesia to achieve an aggregate growth rate of 8 percent per annum? b. With the same ICOR, what growth target could be achieved with a saving rate of 27 percent? c. If there is a large increase in the saving rate, and therefore a large increase in the amount of new capital formation, is the ICOR likely to rise, fall, or remain the same? Explain.

          II- PROBLEMS

PROBLEM 1
In Indonesia during the 1970s the incremental capital-output ratio (ICOR) averaged 2.50 .
a. Using the Harrod-Domar growth equation, what saving rate would have been required for Indonesia to achieve an aggregate growth rate of 8 percent per annum?
b. With the same ICOR, what growth target could be achieved with a saving rate of 27 percent?
c. If there is a large increase in the saving rate, and therefore a large increase in the amount of new capital formation, is the ICOR likely to rise, fall, or remain the same? Explain.

II- PROBLEMS

PROBLEM 1
In Indonesia during the 1970s the incremental capital-output ratio (ICOR) averaged 2.50 .
a. Using the Harrod-Domar growth equation, what saving rate would have been required for Indonesia to achieve an aggregate growth rate of 8 percent per annum?
b. With the same ICOR, what growth target could be achieved with a saving rate of 27 percent?
c. If there is a large increase in the saving rate, and therefore a large increase in the amount of new capital formation, is the ICOR likely to rise, fall, or remain the same? Explain.

Added by Robert N.

Question

Please give Ace some feedback