Neco Model Questions Vol1 2024 Economics Question 28
Practice objective / multiple choice question 28 from the 2024 Neco Model Questions Vol1 Economics examination.
Using the Harrod‑Domar model, the annual growth rate of per‑capita income is given by \(g = \frac{s}{k/y} - \delta\), where \(s\) is the savings rate, \(k/y\) the capital‑output ratio and \(\delta\) the depreciation rate. Country X has \(s = 0.20\), \(\delta = 0.05\) and \(k/y = 3\). Country Y has \(s = 0.25\), \(\delta = 0.04\) and \(k/y = 4\). Both countries start with the same per‑capita income of \(100{,}000\) naira. (i) Compute the projected per‑capita income for each country after 10 years. (ii) Identify which country will have the higher per‑capita income after 10 years and by how much (in naira, rounded to the nearest naira).
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This is Neco Model Questions Vol1 2024 Economics Question 28. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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