The concept of "invisible hand" introduced by Adam Smith explains:
a. why people act in their own best interests
b. why the government intervenes to overcome failures in private markets.
c. how people, acting out of self-interest, unintentionally promote the general good.
d. how comparative advantage and specialization promote international trade.
e. how the creation of goods and services generates its own demand by creating employment and income.
c
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Which of the following is true of International Banking Facilities (IBFs) in the U.S.?
a. IBFs were legalized by the Federal Reserve Board in 1970. b. IBFs are bookkeeping systems set up in existing bank offices of the U.S. to record international banking transactions c. IBFs are "shell" bank branches of U.S. banks in the Caribbean. d. Loans extended by the IBFs are subject to reserve requirements and interest rate regulations. e. IBFs are allowed to extend loans to the residents and businesses of the United States and not to the nonresidents.
If the cost of housing increases by 10 percent, then, other things the same, the CPI is likely to increase by about
a. 1.7 percent. b. 3.3 percent. c. 4.2 percent. d. 10 percent.