With Respect to Innovation,which of the Following Statements Is True

question 21

Multiple Choice

With respect to innovation,which of the following statements is true?

• A)Government policy cannot influence the rate of innovation.
• B)The principal incentive for innovation does not appear to be related to profits.
• C)The utilization rate of existing plant and equipment and its durability are independent of the pace of innovation.
• D)Innovation is exogenous to the economic system.
• E)Innovation is often endogenous to the economic system.

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Definitions:

Common Stock

A form of equity security signifying an ownership stake in a company, granting the holder the right to participate in voting on corporate issues and to earn dividends.

Market Price

The present rate at which a service or asset is available for purchase or sale on an open market.

Dividends

Disbursements issued by a corporation to its owners, often in the form of profit sharing.

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the market price per share by the earnings per share.