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3. Recall that the Romer Model: TABLE 6.1 The Romer Model: 4 Equations and 4 Unknowns Unknowns/endogenous variables: Y, A, Ly. Lar Output production function
3. Recall that the Romer Model: TABLE 6.1 The Romer Model: 4 Equations and 4 Unknowns Unknowns/endogenous variables: Y, A, Ly. Lar Output production function Y = A, Ly Idea production function AA,I = ZA,Lat Resource constraint Ly + Lat = L Allocation of labor L = LL Parameters: 7, L, 6, A. a. (4pts) Define the three factors that determine the growth of output per person in the Romer model. b. (4pts) In the Romer model, what is the driving force behind sustained long-term economic growth? c. (4 pts) Are there diminishing marginal products in each of the variables A and L? d. (5 pts) Graph output per person (ratio scale) against time, for any initial value
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