The Laissez-Faire Approach Popular Before the Great Depression Influenced the U.S.government

question 1

Multiple Choice

The laissez-faire approach popular before the Great Depression influenced the U.S.government to see business downturns as:

• A)natural phases in an otherwise healthy system and to therefore take short-term deficit spending measures to help recovery.
• B)natural phases in an otherwise healthy system and to therefore wait for recovery to occur naturally.
• C)serious maladies in an otherwise healthy system and to therefore work to redesign the system to avoid such failure in the future.
• D)failures of the type of system Adam Smith envisaged and to therefore work to move toward an open economy with free trade.
• E)failures of the system to achieve the form that Adam Smith envisaged and to therefore work to decrease government interference at the micro level.

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Definitions:

Pricing High

Setting the price of a product or service significantly above the cost of production or acquisition to achieve higher margins.

Best Response

In game theory, it is the strategy that will give a player the highest payoff, given the strategies chosen by other players in the game.

Simultaneous Game

A type of game in game theory where participants make decisions or select strategies at the same time without knowledge of the others’ choices, exemplified by the Prisoner’s Dilemma.

Shoplifter

An individual who steals merchandise from a retail store.