The Invisible Hand Is Make Up By Adam Smith - 1347 Words

CHAPTER# 1 QUESTION FOR REVIEW: 6.) The term invisible hand is make up by Adam Smith in wealth of nation, to describe the change in nature of marketplace without any interference of government, and it refers to maintain the equilibrium of supply and demand. Like we all driving, and we stop at red lights and go at green lights. Does anybody think, why we do so even there was nobody to stop us? You know we just obey rules and regulations for avoiding the accident. We desire to stop and go, for better future and to avoid dangerous accident. This is a good example of invisible hand. 8.) Productivity means how people of a country intelligently combined their available resources like labour, skills, capital equipment, and raw material, from each†¦show more content†¦13.) If Canadians started saving money, and bank lend this savings in opening new business which off course helps in raising economic growth and standard of living increased. Now government have enough money to do anything, like mention in question for free food. This will effect both, workers hourly wages increased and owner get better profit. 14.) Intelligent decision making mean one should know about the merits and demerits of the thing. If policymaker reduce the rate of inflation, it will leads to deflation- means reduction in general price level of goods and services. Chapter# 5 Questions for review: 5.) The four components of GDP are: †¢ Consumption, is spending done by householders on goods and services. For instance, the purchase of a sugar. †¢ Investment, is the purchase of future used goods for infinite production of goods and services. For example, the purchase of a computer by a business. †¢ Government spending, spending made by government on goods and services like, an order for military aircraft, and sale of American wheat to Russia. 6.) The reason why Economists use real GDP rather than nominal GDP to gauge economic well-being is that the real GDP doesn’t distressed by changes in prices, so it demonstrate only changes in