Adam Smith Suggested That an Invisible Had Guides Market Economies

question 3

Multiple Choice

Adam Smith suggested that an invisible had guides market economies.In this analogy,what is the baton that the invisible hand uses to conduct the economic orchestra?

• A)the government
• B)prices
• C)subsidies
• D)the Federal Reserve

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Definitions:

Retention Ratio

The proportion of earnings kept back in a company to reinvest, rather than being paid out as dividends.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without having to increase debt or equity financing.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a given period.

Inventory Balance

The total value of all the goods and materials held by a company as stock, intended for sale or production.