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If There Are Decreasing Returns to the Ideas Stock in the Knowledge

Question 49

Multiple Choice

If there are decreasing returns to the ideas stock in the knowledge sector,


A) the Romer model cannot explain sustained growth.
B) the Romer model can explain an economy that reaches its steady state.
C) the Romer model can explain sustained growth.
D) the Romer model cannot explain why economies' saving rates differ.
E) the Romer model cannot explain why the output sector exhibits decreasing returns.

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