E-commerce and an internet presence are important to many firms, requiring employees with specialized skills that are in short supply. The invisible hand solves the employment problem by:
A. encouraging the government to set up training programs to provide workers with the necessary skills.
B. discouraging firms from using of new technologies such as the internet.
C. providing free internet access.
D. giving workers an incentive to acquire the necessary skills on their own in order to receive higher wages.
Answer: D
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The short run is the time period during which
A. all of the firm’s costs are fixed. B. the value of the firm’s assets starts to decay. C. the firm can adjust all inputs freely. D. some of the firm’s input decisions are constrained by previous commitments.
What is the argument against the use of autonomous tightening of monetary policy in response to a credit-driven asset-price bubble?
What will be an ideal response?
Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that
a. trade can make everyone better off. b. people face trade-offs. c. rational people think at the margin. d. people respond to incentives.
In the simple Keynesian model, there are three simplifying assumptions. Among these assumptions is:
A) the price level is flexible B) no foreign sector C) the price level is constant until the economy reaches its full-employment level D) the money supply always rises E) b and c