Choice obliges us to give up something while it enables us to achieve something. What is this condition called? a) Marsall effect B) externality NS) trade off D) crowding out TO) Fisher effect
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Choice obliges us to give up something while it enables us to achieve something. What is this condition called? |
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Definition of each available option
Externality: the economic activity of an economic agents affects the welfare of third party which is not directly involved in that economic activity.
Crowding out: this is the effect of an increase in government expenditure, which leads to increased the interest rate and as a result of this marginal investors gets out the market.
Tarde off: due to scarcity of resources, in order to get something we have to give up something.
Fisher effect: that relates the real, nominal interest rate with inflation.
Marshall effect: if the elasticity demand of imports and exports is more than one then, devaluation of currency improve the balance of trade.
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