Adam Smith wrote two very important books. The Wealth of Nations describes how markets work when people exercise self-interest. The other claims that humans
A. have a moral sense which gives them an interest in the wellbeing of others.
B. who reject religion will be unsuccessful in markets.
C. have not relied enough on the visible hand of government to control markets.
D. constantly miscalculate and make bad decisions.
Answer: A
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Which of the following is a TRUE statement concerning bank holding companies?
A) Bank holding companies own few large banks. B) Bank holding companies have experienced dramatic growth in the past three decades. C) The McFadden Act has prevented bank holding companies from establishing branch banks. D) Bank holding companies can own only banks.
If the government were to simultaneously cut the personal income tax and the corporate profits tax, the equilibrium interest rate
A) would fall. B) would rise. C) would be unaffected. D) might either rise or fall.
Net utility is
a. equal to total utility from the quantity acquired of a good minus the utility lost by having to pay for it. b. equal to the sum of the marginal utilities. c. equal to an optimal number easily calculated by the consumer. d. always greater than total utility.
One reason there is political opposition to international trade is that:
A. the potential gains from specialization and trade are small. B. the differences in opportunity costs between countries are small. C. not everyone benefits from trade. D. trade does not increase the total value of goods and services produced by a nation.