Reports from inside the Whitehouse have suggested that the Trump administration is set to announce huge increases in spending on Artificial Intelligence (AI) and Quantum Computing for their 2021 budget proposal.
The research and development funding for AI would increase from $973 million to nearly $2 billion, with spending on quantum computing to increase to around $860 million. The funding would be aimed at greatly enhancing American expertise in the field, training highly specialised workers, and providing resources to develop the most advanced technologies in the world.
These two cutting edge technologies are likely to play an important role in future industries, from commerce to defence, and the US does not want to be playing catch up to other emerging leaders in the field such as China.
THINK LIKE AN ECONOMIST!
Q1. As referred to in the article, what is meant by the term budget proposal?
Q2. Explain the impact that the increased spending on AI and Quantum Computing is likely to have on economic growth?
Q3. With the use of a diagram, draw the effect that this spending would have on the long-run equilibrium level of real output and prices in the US economy.
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