Capital flight is a concern for several african countries


Capital flight is a concern for several African countries. For example, according to data collected by the World Bank, over the last decade capital flight reduced the effective yearly saving rate of Chad from 20% to 11%. Recent estimates show that the capital output ratio of Chad is 3 while the capital depreciation rate is 5%. Using the Harrod - Domar equation, capital flight would have reduced the rate of growth of Chad's GDP by
a) 1.8 percentage points
b) 3 percentage points
c) 4 percentage points
d) 9 percentage points
e) 27 percentage points

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Microeconomics: Capital flight is a concern for several african countries
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