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Chapter 18: Q.6 (page 451)

What are some steps the government can take to encourage research and development?

Short Answer

Expert verified

Direct government funding of R&D, tax incentives for R&D, protection of intellectual property.

Step by step solution

01

Definition

Fiscal Policy:

The term fiscal policy refers to government initiatives that aid in economic stabilization. There are two forms of fiscal policy: contractionary and expansionary, and the government employs both depending on the state of the country.

02

Explanation

Direct government support of R&D, tax incentives for R&D, intellectual property protection, and developing cooperative links between universities and the business sector are just a few of the policy options available to increase the rate of return on new technology and encourage its development.

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