17. A policymaker wants to reduce inflation. In order to make an intelligent decision about
how to do so, the policymaker:
needs to know the causes of inflation, for example, the government's printing of too
should use a simple rule: once infl
1. The main incentive for business activity is:
Score: 1 of 1
2. Adam Smith coined the term invisible hand to mean:
a physical hand that leads individuals to promote social interest by p
9. One benefit of trade is that it:
allows for increased specialization and mass-production techniques that lower per
unit costs of production.
increases the division of knowledge because trade makes people more self-sufficient,
producing more of what the
1. David sells his car, which he considers worthless, to Cameron for $200. Which of the
following statements is true?
This trade did not create value because Cameron is buying a car that David considers
Cameron is the only one made better off b
5. In the 2 hours between classes a student can do one of three things, ranking them from
most to least desirable as: (1) chat with friends, (2) study economics, or (3) eat lunch. This
student's opportunity cost of chatting with friends is:
the value of s
16. Which of the following statements is TRUE?
Specialization and trade raise wages in both countries that are party to the trade.
Trade causes workers in low-wage countries to receive an even lower wage.
Trade makes workers in high productivity countries
13. Institutions that support economic growth are the ones that:
give the government more control over what is produced and how it is produced.
encourage consumption and discourage savings.
provide incentives for entrepreneurs to take risks and innovate.