Which of the following is the free market economist Adam Smith no know for?
(A) The Wealth of Nations
(B) The concept of the invisible hand.
(C) Explaining the idea of laissez faire.
(D) The circular flow model of a mixed economy.
Ans: (D) The circular flow model of a mixed economy.
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Suppose the United States experiences a long period of inflation relative to other countries. How will this affect U.S. net exports?
What will be an ideal response?
In an open economy, desired domestic lending
A) must equal desired domestic borrowing. B) must equal desired domestic borrowing plus the amount of international lending. C) is always greater than desired domestic borrowing. D) is always less than desired domestic borrowing.
When a tax is imposed, the surplus that is lost to buyers and sellers but converted into tax revenue is:
A. transferred to others through public programs. B. lost and considered a cost of taxation. C. part of deadweight loss. D. All of these statements are true.
Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries. B. is an important source of funding for investment in most developing countries. C. does not contribute much to domestic investment in most developing countries. D. is largely wasted in most developing countries because it comes with no strings attached.