Macroeconomics, 9/e

Campbell R. McConnell, University of Nebraska, Lincoln
Stanley L. Brue, Pacific Lutheran University
Thomas P. Barbiero, Ryerson University

An Overview of the Market System and the Canadian Economy

Internet Application Questions


1		Go to www.epistemelinks.com/text/SmitText.htmScroll down and search for the economist/philosopher Adam Smith. Click submit. Then scroll down and search for Wealth of Nations. Click on table of contents. Click on Book 4, chapter 2. The information you are looking for is found in verse 9 (i.e. Book IV, 2-9). Smith's paragraph on the "Invisible Hand" is one of the most famous quotes in over two hundred years of economic theory. . Using Smith's actual text and your textbook, explain how self-interested individuals seeking to maximize their own profits can create a market economy which makes all of society better off. What does Smith mean by the "Invisible Hand"? For a slightly different interpretation of Adam Smith's Invisible Hand, go to www.theatlantic.com/issues/98mar/misquote.htm



2		Go to www.Ncpa.org/pi/welfare/wel53.html And answer the following questions: . According to the text, what are the two types of exchange mechanisms for goods and services in a market economy?



3		In general, which exchange mechanism is said to have an advantage over the other? Explain why.



4		How does the Time-Barter system used in St. Louis allocate essential services? Would double coincidence of wants be a problem in this system? Explain.



5		Why would the system of trade outlined in the article tend to be more attractive to the poor rather than the rich?

2002 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.