Which of the following are assumptions of Kaldor model of economic growth ? Select the correct answer:…
Full employment and the division of national income into wages and profits are assumptions of the Kaldor model. Capitalists have a higher propensity to save than workers,…
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Which of the following are assumptions of Kaldor model of economic growth ? Select the correct answer:
(a) There is a state of full employment in the economy.
(b) National income consists of wages and profits only.
(c) The marginal propensity to save of the workers is more than those of capitalists.
(d) There is an active intervention of government in the economic activity.
Answer and explanation
Correct answer A
Full employment and the division of national income into wages and profits are assumptions of the Kaldor model. Capitalists have a higher propensity to save than workers, reversing the stated comparison. Active government intervention is not an assumption of the basic model.
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Rajasthan SET (RSET)