According to Adam Smith, what is the primary source of a nation's wealth?
A. the amount of gold and silver in the government's possession
B. a spirit of cooperation in which people share according to their means
C. strong central planning authorities
D. the people's ability to produce products and trade in free markets
Answer: D
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If the price effect outweighs the income effect of a wage increase, the labor-supply curve will:
A. slope downward. B. slope upward. C. be perfectly horizontal. D. be perfectly flat.
If the reserve ratio is 100-percent, then a new deposit of $1000 into a bank account
a. eventually increases the money supply by $1000. b. leaves the size of the money supply unchanged. c. eventually decreases the size of the money supply by $1000. d. eventually increases the money supply by $2000.
In a market economy:
A. businesses design their plans to maximize their profit and the market is relied upon to see that individual self-interest is consistent with society's interest. B. workers are directed by government planning boards to produce what is in society's best interest. C. government owns the means of production so that it can produce what is in society's best interest. D. government sets prices to make necessities affordable because it is in society's best interest to make necessities affordable.
The more time that elapses, the
A. smaller the income elasticity of demand for the product. B. more price elastic is the demand for the product. C. greater the income elasticity of demand for a product. D. less price elastic is the demand for the product.