Econoics-college level-help ASAP:part 2?
Answer the next question(s) on the basis of the following national income data. All figures are in billions of dollars.
4.Refer to the above data. Personal consumption expenditures:
A)cannot be calculated.
B)are $231.
C)are $225.
D)are $205.
5.Which of the following best describes the invisible-hand concept?
A)The desires of resource suppliers and producers to further their own self-interest will automatically further the public interest.
B)The nonsubstitutability of resources creates a conflict between private and public interests and calls for government intervention.
C)The market system is the best system for overcoming the scarce resources-unlimited wants problem.
D)Central direction by the government will improve resource allocation in a capitalistic economy.
Answer:
4. There is no data to calculate : (
5. The market system is the best system for overcoming the scarce resources-unlimited wants problem. (C)
* edit* It's really based in the monetarist view that the Feds typically do much harm than good when you mess around with the money supply. They believe that the market will reach equilibrium by itself with out any outside aid.
5. i don't like any answer really since the invisible hand is really talking about prices in the market as signals but C. seems to be the non wrong answer.
A is not always correct - if resource is a monopoly or creates externality then suppliers do not further public interest
B. this one is a maybe - since the invisible hand (prices) can not deal with nonsuitability question but it does not seem to apply to describing the invisible had
D. it is not true that central direction will improve allocation in capitalist system, in fact the invisible hand talks is all about that you don't need a central direction.
So it looks like C by process of elimination
5) A is the best answer. B and D run contrary to the invisible-hand concept. C is a value judgement on which system is best, not a description of the concept. A is the only answer that describes the invisible-hand concept.
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