Related to the Economics in Practice on p. 624: 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, its best strategy would be to have the government help its firms find the world frontier. As firms approach the frontier, the government should offer incentives and encourage some risk-taking. This approach balances government support with private sector initiative and allows for the development and growth of firms in the country.

Related to the Economics in Practice on P