In the Romer Model with Decreasing Returns to the Knowledge

question 72

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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Definitions:

Life Estate

A legal arrangement where an individual is granted the rights to use and benefit from property during their lifetime, but does not own the property outright.

Fee Simple

A type of real estate ownership where the owner has unrestricted rights to the property, including the right to sell or bequeath it.

Future Interest

A legal right to property ownership that will begin at a future date, rather than immediate possession.

Life Tenant

An individual who has the right to use or occupy a property during their lifetime, but does not own the property.