This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What does it mean when a free lunch is available? Relate your answer to the production possibilities ... (Read 81 times)

ENagel

  • Hero Member
  • *****
  • Posts: 540
on: Jun 29, 2018
What does it mean when a free lunch is available? Relate your answer to the production possibilities frontier.
 
  What will be an ideal response?

Question 2

How does a currency drain affect the money multiplier?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

blazinlyss

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jun 29, 2018
Answer to Question 1

A free lunch means that there is no tradeoff, that is, the production of one good or service can be increased without decreasing the production of another good or service and thereby giving up some of the other good. A free lunch occurs when the economy is producing at a point within the production possibilities frontier because at these points some resource is unemployed. By utilizing the unemployed resource, more goods or services can be produced without giving up any other goods or services.

Answer to Question 2

If the currency drain is zero so that all money created is deposited in bank accounts, the money multiplier is equal to one divided by the desired reserve ratio. If the currency drain is positive, then some newly created money is held in cash and is not deposited in bank accounts. In this case, the money multiplier is smaller so that a change in the monetary base leads to a smaller change in the quantity of money.


ENagel

  • Member
  • Posts: 540
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

Jossy

  • Member
  • Posts: 336
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

The relationship between free energy and electron movement along the electron transport chain The relationship between free energy and electron movement along the electron transport chain
El Niño and areas of high marine primary production around the Galapagos Islands. Noti El Niño and areas of high marine primary production around the Galapagos Islands. Noti
(a) IgA. (b) IgA production. (a) IgA. (b) IgA production.
British Iron Production, 1600–1870 British Iron Production, 1600–1870
Barenaked Ladies - Call And Answer (Video Version) Barenaked Ladies - Call And Answer (Video Version)
Production of prototrophs as a result of genetic recombination Production of prototrophs as a result of genetic recombination
Video: Polymerase chain reaction PCR - Animation

For a complete list of videos, visit our video library