Adam Smith wrote that the:
a. economic problems of eighteenth-century England were caused by free markets.
b. government should control the economy.
c. pursuit of private self interest promotes the public interest in a market economy.
d. public or collective interest is not promoted by people pursuing their self interest.
Question 2
When households' marginal propensity to consume (MPC) increases, the size of the spending multiplier:
a. also increases.
b. decreases.
c. remains unchanged.
d. reacts unpredictably.
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