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b) The Romer model focuses on the production of (non-rival) ideas. In class we assumbd the production function for ideas to be A = A(1

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b) The Romer model focuses on the production of (non-rival) ideas. In class we assumbd the production function for ideas to be A = A(1 l)L. Explain what would happen to long-run growth if instead the production function for ideas is A = A9 (1 l)L with 9 > 1 and LL constant. Hint: First calculate the growth rate AM and sketch it in a time vs. A/A diagram. (10 Marks)

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