To what extent can changes in the rate of technological progress cause permanent changes in the rate of growth of output per worker? Explain.

What will be an ideal response?

ANSWER:

For example, an increase in the rate of TP will cause the required investment line to become steeper. K/NA and Y/NA will fall over time to some permanently lower level. The increase in the rate of TP will cause the rate of growth of Y and Y/N to increase over time and to reach a permanently higher level.