The "invisible hand" described by Adam Smith refers to the
a. allocative role of markets and market forces
b. importance of government intervention and central planning
c. actions of successful entrepreneurs in directing the economy
d. role of monopolized industries in leading the nation
e. value of religious belief in creating an ideal economy
A
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Refer to Figure 27-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) expansionary automatic stabilizers. B) contractionary monetary policy. C) contractionary fiscal policy. D) expansionary monetary policy. E) expansionary fiscal policy.
Suppose you observed that at the same time employment increased, wages fell. Which of the following is a possible explanation for this observation?
a. An increase in labor demand b. A decrease in labor demand c. An increase in labor demand that was outpaced by an increase in labor supply d. A decrease in labor supply e. Cannot be determined from the available information
A deficit in the overall balance of payments of a nation generally is an indication that
A. the country's monetary authority is selling domestic government bonds. B. the country's monetary authority is buying domestic government bonds. C. the country's monetary authority is buying foreign currency. D. the country's monetary authority is selling foreign currency.
If the value of the cross elasticity of demand is negative, the two goods are
A) complementary goods. B) substitute goods. C) normal goods. D) inferior goods.