(1) In lecture we saw that growth in the macro-economy comes from the growth of business enterprise and much growth in business comes from R&D. R&D lowers cost structures, increases economic welfare, and results in large amounts of output and consumption. When business interacts in the world of R&D, there are two Effects that result in R&D - the Replacement Effect, and the Efficiency Effect. What is meant by the Replacement Effect? What is meant by the Efficiency effect