Author Question: What does a production point beyond the production possibilities frontier represent? What will be ... (Read 148 times)

piesebel

  • Hero Member
  • *****
  • Posts: 565
What does a production point beyond the production possibilities frontier represent?
 
  What will be an ideal response?

Question 2

Describe how a demand-pull inflation can occur.
 
  What will be an ideal response?



tkempin

  • Sr. Member
  • ****
  • Posts: 332
Answer to Question 1

A production point beyond the production possibilities frontier is an unattainable combination of products.

Answer to Question 2

Demand-pull inflation starts from an initial increase in aggregate demand. But if this increase is a one-time only event, the result is a higher price level but not inflation. For inflation to occur, aggregate demand needs to continue to increase. Continuing increases in the quantity of money result in continuing increases in aggregate demand, so monetary growth is necessary for a demand-pull inflation.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

For a complete list of videos, visit our video library