Answer to Question #317771 in Macroeconomics for Shlok

Question

[An increase in the productivity of research.] Suppose, there is a onetime increase in the

productivity of research Θ (theta), as in the Figure 5.1 (in textbook, Jones’). What will

happen to the level of technology, A and the growth rate overtime?

Answer 1

An increase in the productivity of research will eventually lead to increase in not only the level of technology but as well as the quality of research and the way of undertaking quality research. This will also increase the quantity and quality of research done over time.