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Question 8

An economic analyst is comparing the growth prospects of four developing countries using the Harrod–Domar model. The table below shows the savings ratio and the capital-output ratio for each country:

CountrySavings ratio (sss)Capital-output ratio (ccc)
Country A25%5.0
Country B12%2.0
Country C20%4.5
Country D18%3.6

According to the Harrod–Domar model, which country is projected to achieve the highest annual rate of economic growth?

Country A

Country B

Country C

Country D

Development Questions

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