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Chapter 29: Problem 17

"Innovations do not remain isolated events, and are not evenly distributed in time, but ... on the contrary they tend to cluster, to come about in bunches, simply because some, and then most, firms follow in the wake of successful innovation." Who made this statement? (LO6, 7) a) Frank Knight c) Karl Marx b) Joseph Schumpeter d) John Maynard Keynes

Short Answer

Expert verified
The short answer is: b) Joseph Schumpeter.

Step by step solution

01

Recognize the content of the quote

Before identifying the author, let's understand the main idea of the quote: "Innovations do not remain isolated events, and are not evenly distributed in time, but ... on the contrary they tend to cluster, to come about in bunches, simply because some, and then most, firms follow in the wake of successful innovation." This is a statement about how innovation tends to occur in clusters rather than being evenly distributed due to the tendency of firms to follow successful innovations.
02

Search for the main concept in each theorist's work

Recall the central themes of each economist's theories: - Frank Knight was known for his work on risk, uncertainty, and profit. - Karl Marx focused on class struggle, historical materialism, and dialectical materialism. - Joseph Schumpeter examined economic evolution, innovation, and creative destruction. - John Maynard Keynes discussed fiscal policy, interest, and aggregate demand management.
03

Identify the author of the quote

Comparing the main idea of the quote to the central themes of each economist's work, it is clear that innovation and clustering are most closely associated with Joseph Schumpeter, who explored economic evolution, innovation, and creative destruction. Therefore, the correct answer is: b) Joseph Schumpeter

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