Related to the Economics in Practice on p. 304: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, what would be its best strategy?
A) The government needs to keep helping its firms find the world frontier until the firms reach the frontier.
B) The government should begin by offering incentives and encourage some risk taking.
C) The government needs to help its firms find the world frontier, and then as firms approach the frontier, the government should offer incentives and encourage some risk taking.
D) The government should adopt a hands-off approach and let the private sector bring the country to the world frontier.

Question

Quizplus · Accepted Answer

According to the study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, the best strategy would be for the government to help its firms find the world frontier. As firms approach the frontier, the government should then offer incentives and encourage some risk taking. This approach allows for a gradual transition towards the world frontier, with the government playing a supportive role in facilitating the process.

Related to the Economics in Practice on P