How does the “invisible hand” work in a competitive market system?
What will be an ideal response?
Businesses and resource suppliers seek to further their own self-interests. Businesses seek to maximize profits and in doing so they make efficient use of society’s scarce resources. Thus the competitive market system directs activity with an “invisible hand” that promotes the social interest. Resources are allocated to their best use and the result produces the greatest amount of consumer satisfaction.
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Evidence shows that many people who delay searching for a job for a year or longer after they are laid off
A) find that they have little to no chance to find new employment after being unemployed for so long. B) find it easier to find new employment than if they had searched for a new job soon after they were laid off. C) find that the extra unemployment benefits they receive during their extended period of unemployment more than make up for the difficulty in finding a job once they decide to re-enter the workforce. D) find it more difficult to find new employment than if they had searched for a new job soon after they were laid off.
What is the difference between the Keynesian and rational expectations theories concerning the success of stabilization policy?
If the price of a good has risen over time,
a. it must have become more scarce. b. it must have become less scarce. c. it has become more scarce only if the price adjusted for inflation has risen. d. it has become less scarce only if the price adjusted for inflation has risen.
Suppose that M is fixed. According to the quantity equation, which of the following would make the price level higher?
a. Y or V rise b. Y or V fall c. Y rises or V falls d. Y falls or V rises