Which of the following are the three concepts of growth in the Harrod - Domar model ?
- ((a))
Warranted growth; natural rate of growth and actual growth
- ((b))
Warranted growth; natural rate of growth and perceived growth
- ((c))
Uncertain growth; natural rate of growth and actual growth
- ((d))
Uncertain growth; specific rate of growth and perceived growth
Show Answer
Warranted growth; natural rate of growth and actual growth
The correct answer is - Warranted growth; natural rate of growth and actual growth

Key Points
- Warranted growth
- It is the growth rate at which the economy will grow when planned savings are equal to planned investments.
- This rate ensures that the economy remains on a steady growth path without any inflationary or deflationary pressures.
- Natural rate of growth
- This rate is determined by the growth of the labor force and technological progress.
- It represents the maximum sustainable rate of growth that an economy can achieve without generating inflationary pressures.
- Actual growth
- It is the real growth rate observed in the economy at any point in time.
- This rate can deviate from both the warranted and natural rates of growth due to various factors like demand fluctuations, policy interventions, etc.

Additional Information
- Perceived growth
- This term is not part of the Harrod-Domar model and generally refers to how growth is viewed or perceived by the public or policymakers.
- It can vary based on subjective factors and may not have a concrete economic definition.
- Uncertain growth
- This is not a standard term in economic growth models.
- It might refer to unpredictable growth patterns, but it is not a defined concept in the Harrod-Domar model.
- Specific rate of growth
- This term does not specifically relate to the Harrod-Domar model.
- It could be interpreted in various ways depending on the context but is not a key concept in the model.








































































