The "invisible hand" concept to describe the guiding function of prices was developed by:
A. Milton Friedman.
B. Jeremy Bentham.
C. Adam Smith.
D. David Ricardo.
Answer: C
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Explain how a tax cut effects employment, labor productivity, and potential GDP
What will be an ideal response?
Assume you set up a sole proprietorship and your lawyer tells you that as the owner you will face unlimited liability. What does that mean?
A) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. B) You are liable for organizing the business. C) You could stand to lose your personal wealth if the business goes bankrupt. D) None of these explain what unlimited liability means.
Supply-side economic policies seek to
A) raise interest rates through contractionary monetary policy. B) increase federal government expenditures. C) increase consumption expenditures by increasing taxes. D) increase saving and investment using tax incentives.
When an economy is producing inside its production possibility frontier,
A. production inefficiency occurs. B. it is efficient so long as it is producing what people want. C. only technological advances will allow it to increase production. D. it must overcompensate by producing outside the curve to achieve efficiency.