New growth theory suggests that the accumulation of knowledge capital can be slowed because knowledge is both nonrival and nonexcludable. how does the federal government intervene in the market to increase the amount of knowledge capital?

The way that federal government intervention increase the amount of knowledge capital are through :
- Patents
- subsidies 

Knowledge capital refer to the capital that derived from one's intellectual property. Through the development of patents government protect the big idea that became the basis  of the business. Through subsidies, government could support experiment or researches that will potentially benefit the country in the future