Because Investors Often Cannot Be Fully Compensated for the Benefits

question 120

True/False

Because investors often cannot be fully compensated for the benefits their ideas provide to others, they may produce too little technology. Thus, there is a potential role for government in providing funds for research and development, both in industry and in universities.

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Definitions:

Direct Taxes

Taxes levied directly on an individual's or organization's income or wealth, such as income tax or property tax.

Tax Revenue

The income that is gained by governments through taxation from individuals and businesses.

Federal Government

The national government of a federation, which holds authority over the political units constituting the federation, handling matters that affect the country as a whole.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of additional income that is paid in taxes.