With respect to innovation, which of the following statements is true?
A) The utilization rate of existing plant and equipment and its durability are independent of the pace of innovation.
B) Innovation is often endogenous to the economic system.
C) The principal incentive to innovation does not appear to be related to profits.
D) Government policy cannot influence the rate of innovation.
E) Innovation is exogenous to the economic system.

Question

Quizplus · Accepted Answer

Innovation is often a result of interactions within the economic system, such as competition and market forces. It is not a constant and can be influenced by various factors, including government policies, research and development, and consumer demand. Therefore, innovation is endogenous to the economic system. The other statements are false. The utilization rate and durability of plant and equipment can be affected by innovation, the main incentive to innovation is typically profits or potential profits, and government policy can play a significant role in promoting or hindering innovation.

With Respect to Innovation, Which of the Following Statements Is