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Consider the following statement: “In an economy where there are small, informal firms that use primitive,...

Consider the following statement:
“In an economy where there are small, informal firms that use primitive, non-innovative technologies in all sectors, the government must implement a policy that simultaneously stimulates demand in all sectors.”
Is this statement true? Why, or why not? Explain with references to the modern theories.

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Answer #1

3. In this case, in an economy where there are small informal phones that use primitive and non-innovative technologies in all the sectors the government must implement a policy that must simultaneously stimulate demand in all the sectors so this statement is true.
ln, my opinion this statement is not a hundred percent true because of some reasons.
Sometimes when the economy is following the labour intensive technique then it is very difficult for the Nation's to use the innovative Technologies because it involves I use cost and the developing and underdeveloped economies are not able to hear that cost so that's the only reason they prefer to adopt labour intensive technique instead of capital intensive technique and they are not able to be the innovative Technologies because sometimes innovative Technologies as based on the experimental Research and these experimental research are not up to the mark to handle the present and practical challenges.
Some modern theories are given by Paul Samuelson and their subordinates and it is related to the theory of productivity the theory of price discrimination and the theory of technological up-gradation in the economic sector

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