Suggest two policies the government could pursue to help increase the accumulation of knowledge

What will be an ideal response?

Any two of the following three explanations are correct.
First, the government could increase the incentive to engage in research and development by giving firms the exclusive rights to their discoveries for a long period of time. The U.S. government does this by granting patents, or the exclusive right to produce a product, for 20 years to firms that invent new products or processes. This allows the company to capture the profits from selling this product exclusively.
Second, the government can encourage research and development by directly subsidizing research and development. This can be done by granting tax benefits to the firm that invests in research and development, providing support for research at a university, or directly carrying out the research itself.
Third, the government can subsidize education. This should increase the number of workers with technical training.