Explain what would happen to long-run growth if instead the production function for ideas is À = A(1 − 1)Lº, with 0 < 1 and l, L constant. Hint: First calculate the growth rate A/A and sketch it in a time vs. A/A diagram.
Explain what would happen to long-run growth if instead the production function for ideas is À = A(1 − 1)Lº, with 0 < 1 and l, L constant. Hint: First calculate the growth rate A/A and sketch it in a time vs. A/A diagram.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![-
Explain what would happen to long-run growth if instead the
production function for ideas is À = A(1 – I)Lº, with 0 < 1 and I, L
constant. Hint: First calculate the growth rate À/A and sketch it in a
time vs. A/A diagram.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e652188-6cd4-4b89-832b-e35d8794b53d%2F2aa63805-c319-4ba7-94d5-e0dbef484770%2Fvhvffp6_processed.png&w=3840&q=75)
Transcribed Image Text:-
Explain what would happen to long-run growth if instead the
production function for ideas is À = A(1 – I)Lº, with 0 < 1 and I, L
constant. Hint: First calculate the growth rate À/A and sketch it in a
time vs. A/A diagram.
![The Romer model focuses on the production of (non-rival) ideas. We
have assumed the production function for ideas to be À = A(1 – l)L](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e652188-6cd4-4b89-832b-e35d8794b53d%2F2aa63805-c319-4ba7-94d5-e0dbef484770%2Fa8hdxqw_processed.png&w=3840&q=75)
Transcribed Image Text:The Romer model focuses on the production of (non-rival) ideas. We
have assumed the production function for ideas to be À = A(1 – l)L
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