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The Production Possibility Frontier (PPF) is a graph that shows the maximum possible combination of two goods that can be produced with available resources and technology. In Nigeria, it can be used to illustrate the trade-offs between two sectors, such as agriculture and manufacturing, and the opportunity cost of shifting resources from one to the other.

A mixed economy solves its economic problems by combining the principles of a free enterprise system with government intervention. As a result, contemporary issues like banking sector consolidation and cash policy reform are not left to the market alone but are actively managed through government policies and regulations.

Instability in agricultural incomes is a significant problem in Nigeria, often caused by factors like reliance on rain-fed farming, pest infestations, and volatile commodity prices. Unpredictable weather and low-tech farming methods lead to fluctuations in supply, which, combined with inelastic demand, causes sharp swings in prices and, consequently, farmers' incomes.

The primary role of commercial banks is to act as a financial intermediary. They accept deposits from savers and lend this money to individuals and businesses, thereby creating credit and facilitating economic activity. They are crucial for channeling funds from those with a surplus to those with a deficit for investment.

The key difference between perfect and imperfect markets lies in the degree of product differentiation and the presence of barriers to entry and exit. In a perfectly competitive market, the product is homogeneous, and there are no barriers. In imperfect markets (monopoly, oligopoly, monopolistic competition), firms have some control over price due to product differentiation and/or barriers to entry.

A subsidy lowers the cost of production for firms. This encourages producers to supply more at every price level, causing the supply curve to shift to the right. As a result, the new market equilibrium will be at a lower price and a higher quantity.

Demand-pull inflation occurs when aggregate demand in an economy is greater than aggregate supply. In Nigeria, this is often caused by factors such as excessive government spending, which injects more money into the economy, or a rapid increase in the money supply, which gives people more money to spend, bidding up prices.

A mixed economy is a system that combines elements of both a free enterprise system and a centrally planned economy. This means that economic problems are solved through both the price mechanism of the market and government intervention or planning. Nigeria's economy exemplifies this, with both private businesses and government agencies playing key roles in resource allocation and production

Economic growth is defined as an increase in a country's real output over time, which can be measured by metrics like GDP or GNP. On the other hand, economic development is a much broader concept that encompasses qualitative changes and improvements in the overall quality of life, including reduced poverty, better healthcare, improved education, and infrastructure development. A country can experience growth without experiencing true development if the gains are not equitably distributed.

The liquidity preference theory argues that people hold money for three main reasons: transactions, precautionary motives, and speculative motives. In this case, the investor's preference for having cash readily available (for transactions or unexpected events) over a long-term, illiquid investment is a prime example of a preference for liquidity.

A market with monopolistic competition is characterized by having many firms that sell similar but slightly differentiated products. Each firm has a mini-monopoly over its specific product (e.g., a special type of bread or a unique recipe), but they face strong competition from other firms selling close substitutes. In contrast, a perfectly competitive market involves identical products with no differentiation.

The inductive method involves deriving general economic principles from a series of specific observations or facts. The analyst observes a specific event (fuel price increase) and then uses this to form a general conclusion about its effect on another variable (transportation costs). This is distinct from the deductive method, which starts with a general theory and uses it to predict specific outcomes.

Public corporations are often established to provide merit goods (like education and healthcare) or to operate in sectors that are natural monopolies (like electricity and water supply). The private sector might not be willing to invest in these areas due to high costs or low profitability, so the government steps in to ensure the services are available to the public.

Open market operations, which involve the buying and selling of government securities, are a key tool of monetary policy. When the central bank wants to reduce the money supply, it sells securities to commercial banks. The banks pay for these securities with their reserves, which reduces the amount of money they have available to lend out, thereby contracting the money supply and curbing inflation.

Over-population occurs when the population of a country is too large to be supported by its available resources at a given level of technology. This leads to a decline in the per capita income and overall quality of life for the population. This is in contrast to optimum population, which is the ideal population size that maximizes the per capita output and living standards.

Capital, which refers to man-made goods used in the production process (e.g., machinery, buildings), is rewarded with interest. The owner of the capital receives interest for allowing its use, which represents the cost of borrowing money or the return on the investment in capital.

Public debt refers to the total amount of money that the government has borrowed to finance its spending. This can include both internal debt (borrowing from within the country) and external debt (borrowing from foreign sources).

Fiscal policy refers to the use of government spending and taxation to influence the economy. When the government increases spending, it's engaging in an expansionary fiscal policy to stimulate economic activity.

A fixed cost is an expense that does not change with the level of production or sales. Rent, salaries, and advertising campaigns are classic examples. Variable costs, in contrast, change with the level of output.

Scarcity is a core economic problem that arises because human wants are unlimited, but the resources available to satisfy them are limited. This forces individuals and societies to make choices about which wants to satisfy and which to forgo. The decision of what to consume is a direct consequence of this scarcity.