Briefly explain why the two production possibilities curves are closer together where they meet the y-axis than where they meet the x-axis in this set of production possibilities curves.
What will be an ideal response?
The new technology is specifically related to agriculture, not all areas. That means there is a technological advance in food production but not in housing production. The technological advance in agriculture causes the production possibilities curve to extend out further on the horizontal axis, which measures food production.
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The bank lending channel
A) emphasizes the role of interest rates in the money supply process. B) emphasizes the importance of borrowers' net worth to the decision of lenders to grant loans. C) emphasizes the behavior of bank-dependent borrowers. D) is another name for the interest rate channel.
What is the consequence of a positive externality in a market? What is the consequence of a negative externality? Why those consequences occur?
What will be an ideal response?