Question: in addition to the use of fiscal and monetary policies...
In addition to the use of fiscal and monetary policies to restore the economy to reach its existing full productive capacity, you are also responsible for developing policy recommendations that will expand Australia’s economic productivity capacity further. Informed by your economic studies, you know that innovation policy plays an important role for bolstering the country’s economic prosperity and living standards over the longer-term time horizon.
Question: Explain what factors can motivate innovation? What can a government do to foster more innovation in the economy?