Which of the following examples shows Adam Smith’s “invisible hand”?
a. Millions of people through buying and selling adjust how resources such as steel are used.
b. The Federal Trade Commission uses consumer protection laws to adjust resource allocation.
c. The five largest banks adjust loan interest rates, which affect the free market.
d. Five countries form a trade agreement that spurs the economy in each country.
a. Millions of people through buying and selling adjust how resources such as steel are used.
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The U.S. real interest rate rises relative to the British real interest rate. British net exports ________ and the British exchange rate ________
A) increase; rises B) increase; falls C) decrease; rises D) decrease; falls
Why are corporate executives are often guaranteed "golden parachutes" if they should be fired?
a. To give them the incentive to take the higher levels of risk desired by stockholders. b. To ensure that they exercise great caution in spending stockholders' money. c. To encourage the most experienced people to apply for the executive positions. d. To provide a signal to the public that the firm is on solid financial ground.