In the inverted-U theory of R&D:
A. process innovation and product innovation are inversely related.
B. technological change is inversely related to scientific discovery.
C. R&D expenditures rise continuously as a percentage of firms' sales as industry
concentration rises.
D. R&D expenditures first rise as a percentage of firms' sales as industry concentration
increases, but then fall as higher industry concentration occurs.
Answer: D
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A) economic development B) economic modernization C) comparative advantage D) industrial growth
The above figure shows the market for steel ingots. An externality can be seen because
A) the social marginal cost exceeds the private marginal cost. B) the private marginal cost exceeds the social marginal cost. C) the optimal quantity of steel is zero. D) not enough steel gets produced by the competitive market.
Suppose that M is fixed. According to the quantity equation, which of the following would make the price level higher?
a. Y or V rise b. Y or V fall c. Y rises or V falls d. Y falls or V rises