Waec Model Questions Vol1 2022 Economics Question 26
Practice objective / multiple choice question 26 from the 2022 Waec Model Questions Vol1 Economics examination.
A developing country wants its real per‑capita income to grow at an average rate of 3 % per year over the next five years. During the same period its population is expected to increase from 150 million to 165 million. The Harrod‑Domar model relates the real GDP growth rate (g) to the savings rate (s) and the capital‑output ratio (v) by \(g = \frac{s}{v} - \delta\), where \(\delta\) is the depreciation rate, given as 5 % per year. The current savings rate is 15 % of GDP and the capital‑output ratio is 4. What savings rate must the economy attain (as a percentage of GDP) to meet the per‑capita income target, and by how many percentage points must the current savings rate increase?
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About This Question
This is Waec Model Questions Vol1 2022 Economics Question 26. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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