Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?
What will be an ideal response?
Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.
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A default premium is the interest rate premium
A) under normal market circumstances. B) when there are no market fluctuations. C) covering the default risk. D) for government debt.
The French respect individual freedoms even as they accept collective action to reach important national goals of social solidarity and equality. What has been the major cost of a government-run system in France?
a. The long waiting lists of expensive medical services. b. The high out-of-pocket spending with over 90 percent of the population purchasing supplementary private insurance. c. An erosion of the incomes of physicians relative to those of the average wage and salary worker. d. An erosion of physician autonomy in making treatment decisions. e. Both b and c are true.
When the government increases spending (holding taxes constant), the budget balance _____. This causes the interest rate in the market for loanable funds to _____ and investment to _____
Fill in the blank(s) with correct word
A tax multiplier equal to -4.30 would imply that a $100 tax increase would lead to a:
a. 43 percent decrease in real GDP. b. $430 decline in real GDP. c. $430 increase in real GDP. d. 4.3 percent increase in real GDP. e. 4.3 percent decrease in real GDP.