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In which stage of Schumpeter's theory of innovation does derived investment play a significant role?
  • a)
    First Approximation.
  • b)
    Second Approximation.
  • c)
    Both stages equally.
  • d)
    Neither stage.
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
In which stage of Schumpeter's theory of innovation does derived inves...
Derived investment plays a significant role in the "First Approximation" stage of Schumpeter's theory of innovation. This stage involves the initial impact of innovations on an economy. As autonomous investment increases income, the multiplier effect leads to derived investment, which is influenced by increased consumer demand. This derived investment initiates the acceleration process, which is a key factor in explaining business cycles according to Schumpeter's theory.
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In which stage of Schumpeter's theory of innovation does derived investment play a significant role?a)First Approximation.b)Second Approximation.c)Both stages equally.d)Neither stage.Correct answer is option 'A'. Can you explain this answer?
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