In which of the following approaches/theory, the rate of growth of population growth is treated as…
The classical subsistence/population mechanism and Nelson' s low-income trap make population growth respond to income, so it is endogenous in I and II. In the usual Domar…
Choose your answer
In which of the following approaches/theory, the rate of growth of population growth is treated as exogenous ?
I. Classical theory of development
II. Low income equilibrium trap of Nelson
III. Domar growth model Select the answer from the codes below :
Answer and explanation
Correct answer B
The classical subsistence/population mechanism and Nelson' s low-income trap make population growth respond to income, so it is endogenous in I and II. In the usual Domar framework, population/labour growth is external to the investment-induced demand/capacity mechanism. Thus only III is the independently supported answer to the printed ' exogenous'. The August key instead chooses only I-and-II, which would fit ' endogenous'; the English source clearly prints exogenous. Retain the discrepancy for detailed evaluation.
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UGC NET Economics