Even If There Are Decreasing Returns to the Ideas Stock

question 89

Multiple Choice

Even if there are decreasing returns to the ideas stock in the knowledge sector, the Romer model:

• A) cannot explain sustained growth.
• B) can explain an economy that reaches its steady state.
• C) can explain sustained growth.
• D) cannot explain why economies' saving rates differ.
• E) cannot explain why the output sector exhibits decreasing returns.

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