Adam Smith in The Wealth of Nations argued that:
a. society works best when people act unselfishly
b. society works best when people act in their own self interest
c. society works best when people act as if they are invisible to others
d. the social order needs the guidance of the government's visible hand
e. none of the above
Ans: b. society works best when people act in their own self interest
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To determine the equilibrium price level and equilibrium level of real GDP, the aggregate demand and aggregate supply must
A) be considered as a multiplier. B) be disregarded. C) be considered separately. D) intersect.
One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals b. Moral hazard has to do with unobservable actions of individuals c. Adverse selection is individuals change their behaviors because of a contract d. Adverse selection is when you choose the wrong answer on a test