This economic term or expression refers to markets and prices determining what gets bought and sold in our economy, seemingly almost automatically without interference or orders from anyone.
a) Consumer sovereignty
b) Demand
c) Invisible hand
d) Capitalism
e) Circular flow
c) Invisible hand
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Which of the following could lead to an upward shift in the consumption function?
A) A decrease in home values B) A decline in wages C) An increase in stock prices D) A rise in wages
Suppose the required reserve ratio is 10 percent, but banks choose to hold an additional 15 percent of demand deposits as excess reserves. Under these conditions, the demand deposit multiplier will be
a. 0 b. 4 c. 5 d. 6.67 e. 10
Which of the following examples would make banks most likely to give loans?
a. A bank receives $10 million from the Fed; interest rates are at 1 percent. b. A bank receives $5 million from the Fed; interest rates are at 7 percent. c. A bank receives $2 million from the Fed; interest rates are at 4 percent. d. A bank receives $1 million from the Fed; interest rates are at 5 percent.
The Lorenz curve is criticized for all of the following EXCEPT
A. that it excludes transfers-in-kind income. B. that it does not account for the size differences of households. C. that it does not account for the impact of trade on the standard of living. D. that it does not account for age differences of households.