The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?
a. David Ricardo
b. Thorstein Veblen
c. John Maynard Keynes
d. Adam Smith
d
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
When the aggregate demand curve shifts ________ than the long-run aggregate supply shifts rightward, the result will be inflation
A) rightward at a faster rate B) leftward at a slower rate C) leftward at the same rate D) rightward at a slower rate
Jack had an accident that caused a damage of $4,200 to his car. He had to pay $500 for repair while his insurer paid the remaining amount. Why do insurance companies have such policies?
What will be an ideal response?
A decrease in the price level accompanied by no change in the money wage rate leads to ________ movement along the ________ aggregate supply curve
A) a downward; short-run B) an upward; short-run C) a downward; long-run D) an upward; long-run