Suppose thatz, the marginal product of efficiency units of labour, increases in the endogenous growth model. What effects does this have on the rates of growth and the levels of human capital, consumption, andoutput? Explain your results.

An increase in the marginal product of efficiency units oflabour, z, in the endogenous model

will not affect

will decrease

will increase

the level ofoutput,

will increase

will not affect

will decrease

the level ofconsumption, and

will increase

will decrease

will not affect

the level of human capital. The increase in z

will not affect

will increase

will decrease

the growth rate ofoutput,

will decrease

will increase

will not affect

the growth rate ofconsumption, and

will decrease

will not affect

will increase

the growth rate of human capital.