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