Which of the following is a characteristic of the 'Quality Ladder' models of endogenous growth?
A. There is no role for research and development
B. Growth is purely exogenous
C. Innovation only expands the variety of products
D. Innovation takes the form of improvements in the quality of existing products
Answer: Option D
Solution (By JKSSB Mock Tests)
Quality-ladder (or vertical-innovation) models of endogenous growth, associated with Aghion-Howitt and Grossman-Helpman, treat innovation as successive improvements in the quality of intermediate or final goods.
Explanation:
Credit rationing is a qualitative (selective) credit control measure. Bank Rate, OMO and variable reserve ratios (CRR/SLR) are quantitative measures.
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