Adam Smith believed that a nation would produce the maximum wealth by relying on government to make public interest economic decisions
a. True
b. False
Indicate whether the statement is true or false
False
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An increase in productivity will ________.
A. increase aggregate supply and aggregate demand B. increase aggregate supply C. decrease aggregate supply and aggregate demand D. increase aggregate demand
The "shoe-leather" cost of a fully anticipated inflation is
A) the inconvenience of holding less cash. B) the higher prices of imported raw materials due to currency depreciation. C) the extra time spent on shopping in order to beat price increases. D) the effort of changing posted prices on price tags and producing new price lists and catalogs.
The free-rider problem plagues public goods because
A) public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society. B) once public goods are produced it is not possible to exclude anyone from consuming these goods. C) the government can refuse to serve a citizen. D) the public doesn't care about public goods.
Although monopolistically competitive markets offer consumers a wide variety of differentiated products, there may still be insufficient variety if
a. there are large fixed costs in the market. b. there are no barriers to entry in the market. c. the business-stealing externality is present in the market. d. the government does not impose regulations on the market.