Related to the Economics in Practice on p. 626: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, what would be its best strategy?

A. The government needs to keep helping its firms find the world frontier until the firms reach the frontier.
B. The government should begin by offering incentives and encourage some risk taking.
C. The government needs to help its firms find the world frontier, and then as firms approach the frontier, the government should offer incentives and encourage some risk taking.
D. The government should adopt a hands-off approach and let the private sector bring the country to the world frontier.


Answer: C

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