Developed economies need to engage in research and development more than do developing economies because developed economies
A) have greater capital depreciation rates
B) have largely exhausted the gains from capital accumulation
C) are inherently less innovative than developing economies
D) need to exploit rent-seeking opportunities in order to continue growing
E) have smaller workforces

Question

Quizplus · Accepted Answer

Developed economies have already accumulated a significant amount of capital, which means that the gains from further capital accumulation are diminishing. Therefore, developed economies must focus more on research and development in order to make new technological advancements and improve productivity. Developing economies have more room for growth through capital accumulation and absorbing technology developed in developed economies.

Developed Economies Need to Engage in Research and Development More