Policies that increase research and development spending will increase the rate of technological change and thus shift the production function up vertically.

Question

Quizplus · Accepted Answer

Research and development spending leads to increased innovation and technological advancements, which in turn lead to an increase in productivity and economic growth. By shifting the production function up vertically, more output can be produced with the same level of inputs, leading to higher economic output and living standards.

Policies That Increase Research and Development Spending Will Increase the Rate