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In the Romer Model with Decreasing Returns to the Knowledge

Question 57

Multiple Choice

In the Romer model with decreasing returns to the knowledge sector,


A) the transition dynamics appear very similar to those in the Solow model.
B) an increase in the research share increases the growth rate in the short run.
C) an increase in the research share increases the growth rate in the short and long runs.
D) a decrease in the research share increases the growth rate in the short run.
E) Both a and b are correct.

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