Which of the following best describes the invisible-hand concept?
A. The desires of resource suppliers and producers to further their own self-interest will
automatically further the public interest.
B. The nonsubstitutability of resources creates a conflict between private and public interests
and calls for government intervention.
C. The market system is the best system for overcoming the scarce resources-unlimited
wants problem.
D. Central direction by the government will improve resource allocation in a capitalistic
economy.
Answer: A
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If real GDP increases over time, the cost of living will
A) always remain constant. B) always decrease. C) always increase. D) either remain constant or increase. E) More information is needed to determine how the cost of living changes.
The fact that some people can afford to live in beautiful homes while others are homeless, is most directly an example of an economy facing the ________ part of one of the two big economic questions
A) "for whom" B) "when" C) "how" D) "why"
A random walk model can more accurately predict exchange rates as compared to a sophisticated forecast
A) always. B) for forecasts up to a year away. C) for forecasts longer than a year away. D) never. E) because of the predictability of exchange rates.
In the long run, the producer can change the entire plant size to produce a certain level of the output
a. True b. False Indicate whether the statement is true or false