1. Adam Smith's invisible hands refers to:
A. The subtle and often hidden methods that businesses use to profit at consumers' expense.
B. The ability of free markets to reach desirable outcomes, despite the self-interest of market participants.
C. The ability of government regulation to benefit consumers, even if the consumers are unaware of the regulations.
D. The way in which producers or consumers in unregulated markets impose costs on innocent bystanders.
2. Governments may intervene in a market economy in order to:
A. Protect property rights.
B. Correct a market failure due to externalities.
C. Schieve a more equal distribution of income.
D. All of the above.
3. If a nation has high and persistent inflation, the most likely explanation is:
A. The central bank creating excessive amounts of money.
B. Unions bargaining for excessively high wages.
C. The government imposing excessive levels of taxation.
D. Firms using their monopoly power to enforce excessive price hikes.
1. Adam Smith's invisible hands refers to:
A. The subtle and often hidden methods that businesses use to profit at consumers' expense.
B. The ability of free markets to reach desirable outcomes, despite the self-interest of market participants.
C. The ability of government regulation to benefit consumers, even if the consumers are unaware of the regulations.
D. The way in which producers or consumers in unregulated markets impose costs on innocent bystanders.
2. Governments may intervene in a market economy in order to:
A. Protect property rights.
B. Correct a market failure due to externalities.
C. Schieve a more equal distribution of income.
D. All of the above.
3. If a nation has high and persistent inflation, the most likely explanation is:
A. The central bank creating excessive amounts of money.
B. Unions bargaining for excessively high wages.
C. The government imposing excessive levels of taxation.
D. Firms using their monopoly power to enforce excessive price hikes.
