Assess the arguments for and against patents in terms of creative destruction
What will be an ideal response?
Some economists argue that the patent system gives the holders too much power, and the outcome is creative destruction. For complicated consumer products that can be differentiated by brand association and costly production costs the patent may be protecting old companies from their new competitors. The innovative rivals may have difficulty entering the market due to the existing patents. For these industries removing patents or decreasing the length protection may foster innovation. For industries where products can be easily reproduced and differentiation is difficult, the patents help companies recover the research and development costs that go into a product. The patent system, in these instances, may promote innovation. The usefulness of the patent system depends on industry.
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An increase in the real interest rate does which of the following?
A) increases the demand for loanable funds B) reduces saving C) reduces consumption spending D) reduces the demand for loanable funds
In response to the overvalued dollar in the early 1970s, the German Bundesbank bought ________ and sold ________ to keep the exchange rate fixed, gaining international reserves
A) marks; dollars B) marks; pounds C) dollars; marks D) dollars; pounds