In the romer model, if an economy’s research share decreases, there will be:
a. an immediate increase in output and output growth accelerates
b. an immediate decrease in output and output growth slows
c. no change in output but output growth slows
d. an immediate decrease in output and output growth accelerates
e. an immediate increase in output and output growth slows

Answer

E. An immediate increase in output and output growth slows

Explanation:

Option  correct E

If an economy's share of a researcher decreases  there will be an immediate increase in output and output growth will slow. Is important to remember the importance of the Romer model, which priorizes the human capital, as an endogeneous variable.

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