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.

Question

Quizplus · Accepted Answer

Innovation is often a result of the economic system itself, as companies are incentivized to innovate in order to remain competitive and increase profits. This is known as endogenous innovation, as opposed to exogenous innovation which occurs independently of economic factors. Government policies can also play a role in promoting innovation through research and development incentives and intellectual property protection. The utilization rate and durability of plant and equipment may be affected by innovation, as new technology can render old equipment obsolete or reduce the need for certain processes. Overall, choice (E) is the most accurate statement.

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