The Endogenous Growth Model Suggests

question 84

Multiple Choice

The endogenous growth model suggests:

• A)that technology has significant positive externalities.
• B)the private sector, on its own, may spend too little on research and development.
• C)the government can play a role in stimulating research and development.
• D)none of factors.
• E)all of these factors.

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Definitions:

Alternative Use

The value or potential benefit that is foregone as a result of using an asset or resource in a particular way instead of another possible way.

Sunk Costs

are past expenses that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made, not incurred in the absence of the decision.

Fixed Costs

Fixed costs are those expenses that do not change in total despite changes in the volume of goods or services produced or sold.