According to an article on bloomberg.com, in 2023, Blythe Masters, a former executive at the bank JPMorgan Chase, predicted major changes would occur during the next 10 years in banking and other parts of the financial system: The primary driver is going to be the deployment of artificial intelligence. I don’t think any of us is in doubt about the profound threat and opportunity that artificial intelligence presents. . . . It will change not just the financial-services landscape, but pretty much everything we do.

a. How will the use of chatbots and other types of artificial intelligence (AI) be likely to affect labor productivity in the financial system? Briefly explain.

b. How would the financial system’s use of AI affect the rate of long-run economic growth? Briefly explain using the loanable funds model.