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Question12 The production of new ideas in the Romer model decreases in the efficiency of creating knowledge and in the fraction of labor in research and development. increases in the efficiency of creating knowledge and the fraction of labor in research and development. decreases in the efficiency of creating knowledge and increasing the fraction of labor in research and development. increases in the population growth rate and capital accumulation. increases in the efficiency of creating knowledge and decreasing in the fraction of labor in research and development. ResetMaximum marks: 1 Flag question undefined
Options
A.decreases in the efficiency of creating knowledge and in the fraction of labor in research and development.
B.increases in the efficiency of creating knowledge and the fraction of labor in research and development.
C.decreases in the efficiency of creating knowledge and increasing the fraction of labor in research and development.
D.increases in the population growth rate and capital accumulation.
E.increases in the efficiency of creating knowledge and decreasing in the fraction of labor in research and development.
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Step-by-Step Analysis
The question asks about how the Romer model's production of new ideas responds to changes in key parameters. We are given the five options and the stated correct choice is that the production of new ideas increases when the efficiency of creating knowledge rises and the fraction of labor devoted to research and development (R&D) increases.
Option 1: 'decreases in the efficiency of creating knowledge and in the fraction of labor in research and development.' This describes a worsening of both the knowledge creation process and the investment in R&D, which would logical......Login to view full explanationLog in for full answers
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Question9 Which of the following is NOT an endogenous variable in the Romer model? output the fraction of the population engaged in research the stock of knowledge the number of workers engaged in research the level of capital ResetMaximum marks: 1 Flag question undefined
Question7 In the Romer model, if Canada and Taiwan have the same proportion of researchers and the same knowledge efficiency parameter but Canada’s population is larger, then Taiwan has a higher per capita output growth rate. Canada has a higher per capita output growth rate. Canada’s level of income is greater than Taiwan’s. Canada has higher per capita income than Taiwan. each country’s per capita output grows at the same rate. ResetMaximum marks: 1 Flag question undefined
Question6 The growth rate of per capita GDP in the Romer model depends on the number of workers engaged in research. However, the country of Luxemburg, which has far fewer researchers than the U.S., grows at a rate faster than the U.S. and has a higher per capita GDP. How can the Romer model explain this difference in growth rates? This difference in growth rates is not consistent with the Romer model. The model fails to predict the facts. Due to the nonrivalry of ideas, the economy of Luxemburg grows because the model is based on ideas created throughout the world, not just within that country. The productivity of researchers or the share of workers engaged in research must be smaller in Luxemburg than in the U.S. Luxemburg is richer so according to the principle of transition dynamics, its economy should grow faster. ResetMaximum marks: 1 Flag question undefined
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