Which of the following statements best describes the invisible hand as described by Adam Smith in The Wealth of Nations?
a. It describes how the world should be.
b. Society should focus on other people.
c. Self-interested behavior by individuals can lead to positive social outcomes.
d. Self-interested behavior by individuals is harmful to society.
c. Self-interested behavior by individuals can lead to positive social outcomes.
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If the central bank of Orangeland pursues an expansionary monetary policy, ________
A) its labor supply will fall B) the price level in Orangeland will fall C) the demand for labor in the economy will increase D) the interest rate in Orangeland will rise
Which of the following is NOT correct?
a. Many economist oppose increases in how much people save. b. Saving is an important long-run determinant of a nation's standard of living. c. A change in tax laws that encouraged greater saving would lower interest rates. d. Taxes on interest income can substantially decrease the future value of current saving.
If stock prices follow a random walk, it means
a. long periods of declining prices are followed by long periods of rising prices. b. the greater the number of consecutive days of price declines, the greater the probability prices will increase the following day. c. stock prices are unrelated to random events that shock the economy. d. stock prices are just as likely to rise as to fall at any given time.
The price of a new textbook increases from $200 to $270, while the price of used copies of the textbook increased from $100 to $125. Other things being equal, we would expect
A. the quantity demanded of the used textbook to increase and the quantity demanded of the new textbook to decrease. B. the demand for the new textbook to increase and the demand for the used textbook to decrease. C. the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. D. the quantity demanded of both to fall.