Explain the three growth-creating properties of innovation.
What will be an ideal response?
1. Innovation can create cumulative changes. Most often innovation creates new features or applications of previous technology. Once technical knowledge is created, it can be used over and over again.2. Innovation has a public good property. It is available to the entire public not just to a single firm, and it is nondepletable.3. Innovation has an accelerator property. A steady rate of innovation produces growth in output. A higher level of expenditure on innovation leads to an increase in the growth rate of GDP.
You might also like to view...
If the quantity of money grows at 3 percent per year, velocity does not grow, and real GDP grows at 2 percent per year, then the inflation rate equals
A) -1 percent. B) 1 percent. C) 6 percent. D) 5 percent. E) 12 percent.
Under which of the following does a monopoly's demand curve become its marginal revenue curve?
A) all types of monopoly B) only single-price monopoly C) only perfect price discrimination D) only price discrimination on the basis of the number of units purchased E) any monopoly that price discriminates
You have a bond that will pay you one hundred dollars one year from today. If the prevailing interest rate is r, the bond is currently worth
a. 100/r b. 100r c. 100/(1 + r) d. 100
Which of the following statements best completes this sentence: "On a bank's balance sheet..."?
A. liabilities show the sources of funds and assets show the uses of funds. B. liabilities show the uses of funds and assets show the sources of funds. C. net worth shows the sources of funds and liabilities show the uses of funds. D. assets show the sources of funds and the net worth shows the uses of funds.