In the Domar Model if ΔI / I > α σ, then the economy will face which of the following phase ?
In Domar's model, investment growth exceeding the demand-capacity balance rate makes demand expand faster than capacity. This produces expansionary pressure associated with…
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In the Domar Model if ΔI / I > α σ, then the economy will face which of the following phase ?
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Correct answer C
In Domar's model, investment growth exceeding the demand-capacity balance rate makes demand expand faster than capacity. This produces expansionary pressure associated with a boom. The balance condition is .
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