Economics · Growth and Development
In Kaldor's distribution model, the Coefficient of Sensitivity of Income Distribution measures the change in the profit-to-income ratio (P/Y) resulting from a change in the investment-to-income ratio (I/Y). Given Sp = marginal propensity to save of the profit-earning class and Sw = marginal propensity to save of the wage-earning class, this coefficient is given by:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1SpSp - Sw
- 21Sw - Sp
- 3SwSp - Sw
- 41Sp - Sw✓
Correct answer
1Sp - Sw
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