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Unformatted text preview: How does technological progress come about? The major ways are though innovation and invention. Every year, billions of dollars are spent on research and development by firms and government agencies, like NASA. This money leads to improvements in existing technology and to the creation of new technologies. While innovation and invention may not always be immediately profitable, in the long run they can prove very lucrative for the researchers and the developers--as well as for the economy as a whole, as new, more efficient production technologies become available. Capital expenditures vs. technological progress Let's look at a classic example of technological progress. Say that Sam is a scribe. He spends his days hand copying books and manuscripts. It takes him an average of 1 day to copy a book. Then the printing press is invented. These new devices allow books to to copy a book....
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- Fall '10