Question: 5. Hold a~ain s R fixed for a while. How does an increase in p affect the interest rate r- a, when it is taken

5. Hold a~ain s R fixed for a while. How does an increase in p affect the interest rate r-

a, when it is taken into account how p affects g. , (37), and how g. affects r, (42)? Now try to explain the mechanism through which an increased productivity p in R&D implies that a smaller fraction of resources is directed towards research.

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