The concept of "invisible hand" introduced by Adam Smith explains:
a. why people act in their own best interests
b. why the government intervenes to overcome failures in private markets.
c. how people, acting out of self-interest, unintentionally promote the general good.
d. how comparative advantage and specialization promote international trade.
e. how the creation of goods and services generates its own demand by creating employment and income.
c
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Why does capital depreciate?
What will be an ideal response?
Supply-side economists:
a. saw influence beyond in both the Bush and Clinton administrations. b. disagreed with economist Arthur Laffer's views on taxes. c. were influential in President Reagan's decision to change the tax structure. d. believe that government regulations do not reduce productivity and undermine industrial efficiency.
Natural monopolies result from the peculiar relationship between
a. government regulation and the ownership of scarce resources b. threats to potential entrants and the price of the product c. the size of market demand and the firm's cost structure d. product differentiation and the ownership of patents e. the firm's advertising campaigns and its labor policies
People are likely to want to hold more money if the interest rate
a. increases making the opportunity cost of holding money rise. b. increases making the opportunity cost of holding money fall. c. decreases making the opportunity cost of holding money rise. d. decreases making the opportunity cost of holding money fall.