Who is the profounder of the following proposition of the growth model? A. The capital formation…
In The Accumulation of Capital (1956), Joan Robinson links the rate of capital accumulation to the distribution of income between wages and profits, since saving comes…
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Who is the profounder of the following proposition of the growth model?
A. The capital formation depends on the income distribution.
B. The rate at which labour is utilized depends upon the supply of capital and that of labour.
Answer and explanation
Correct answer A
In The Accumulation of Capital (1956), Joan Robinson links the rate of capital accumulation to the distribution of income between wages and profits, since saving comes mainly from profits. She also shows that how fully labour is employed depends on the supply of capital relative to the supply of labour. Schultz is known for human capital, Solow for the neoclassical growth model, and Pasinetti for his theorem on saving by social classes.
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UGC NET Economics