Question

Unlike in the Solow-Swan growth model, growth rate does not fall as the capital stock

increases in the Harrod-Domar Economic Growth Model for a production function
exhibiting a constant-returns-to-scale. True or false

Answer 1

[AI-generated answer — Bot GPT 3.5]

True. In the Harrod-Domar Economic Growth Model, the growth rate does not fall as the capital stock increases because the production function exhibits constant returns to scale. This means that increasing the capital stock will lead to a proportional increase in output, allowing for sustained economic growth without diminishing returns.