The concept of laissez faire calls for government intervention if market failure is evident.
Answer the following statement true (T) or false (F)
False
Laissez faire is the doctrine of 'leave it alone,' or nonintervention by government in the market mechanism known as the invisible hand.
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Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concepts of advantage and trade, we can say that the opportunity cost of one pair of gloves is:
A. lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production. B. higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production. C. the same for both the United States and Bangladesh, therefore no comparative advantage exists. D. the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.
Vouchers allow students to
A. get free lunches at public schools. B. go to public schools at reduced rates. C. receive discounts on school supplies like pens and paper. D. all of these. E. none of these answer options are correct.
Which of the following are financial intermediaries?
a. both banks and mutual funds b. banks but not mutual funds c. mutual funds but not banks d. neither banks or mutual funds
In the long-run, what happens to the aggregate price level when the Federal Reserve decreases the money supply?
a) The aggregate price level falls. b) The aggregate price level rises. c) The aggregate price level rises and then falls. d) The aggregate price level does not change.