Which of the following would be the most effective public policy for encouraging research and development?
A) subsidizing industries that are at a competitive disadvantage
B) maintaining price stability and encouraging saving and investment
C) increasing interest rates to make investment more profitable
D) reducing resource mobility to ensure an adequate labor supply
E) increasing the scope and extent of industrial regulation

Question

Quizplus · Accepted Answer

Maintaining price stability and encouraging saving and investment create a favorable economic environment for businesses to invest in research and development. Stable prices ensure that businesses can plan for the future without worrying about inflation eroding their profits, while encouraging saving and investment provides the necessary capital for R&D activities.

Which of the Following Would Be the Most Effective Public