Question
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
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 (choose either: will increase, will not affect, and will decrease) the level ofoutput, (choose either: will increase, will not affect, and will decrease)
the level ofconsumption, and (choose either: will increase, will decrease, will not affect) the level of human capital. The increase in z (choose either: will increase, will decrease, will not affect) the growth rate ofoutput, (choose either: will increase, will decrease, will not affect) the growth rate ofconsumption, and (choose either: will increase, will decrease, will not affect) the growth rate of human capital.
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