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Unformatted text preview: rate is 10%. Use the Harrod-Domar( Rostow’s) growth equation to determine the rate of growth. What would the gross savings rate have to be to achieve 5% growth? 5. During the past decade, India has invested about 22% of its GDP while China’s investment rate has been double that of India’s. India’s annual growth rate has been about 6% while that of China has been about 9%. What conclusions can you draw? 6. What are the key assumptions of the Lewis model that give rise to its conclusions? How would the theory’s conclusions differ if these assumptions do not hold?...
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