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    Question

    Which growth model inspired the use of the capital-output ratio for development planning?

    A The Harrod-Domar model Correct Answer Incorrect Answer
    B Solow's model Correct Answer Incorrect Answer
    C Kaldor's model Correct Answer Incorrect Answer
    D Feldman's model Correct Answer Incorrect Answer
    E AK Model Correct Answer Incorrect Answer

    Solution

    The Harrod-Domar model inspired the use of the capital-output ratio for development planning. TheHarrod–Domar model is a Keynesian model of economic growth. It is used in development economics to explain an economy's growth rate in terms of the level of saving and of capital. It suggests that there is no natural reason for an economy to have balanced growth.

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