In the Romer model, the production function , where At is knowledge and Lyt is the amount of labor in the output sector:
A) exhibits constant returns to labor and increasing returns to labor and knowledge
B) exhibits constant returns to labor and increasing returns to knowledge
C) exhibits increasing returns to labor and constant returns to labor and knowledge
D) exhibits decreasing returns to labor and constant returns to labor and knowledge
E) exhibits increasing returns to labor and increasing returns to labor and knowledge
Correct Answer:
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