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Question 1
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
73% (02:25) correct
27%
(02:43) wrong
based on 282
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
72% (00:39) correct 28%
(00:49) wrong
based on 265
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
58% (00:54) correct 42%
(00:58) wrong
based on 258
sessions
History
Date
Time
Result
Not Attempted Yet
Eighteenth-century economist Adam Smith introduced the “invisible hand” as a metaphor for the societal results of individuals’ self-interested actions. Subsequent theorists expanded Smith’s idea to form the “general equilibrium theory,” in which invisible market forces guided the interaction of supply and demand toward a natural balance as individuals act in their own interest and firms pursue the goal of maximizing profit.
Despite the ubiquity of this model in both popular and scholarly thinking, there is no evidence for its truth. Although academic economists have demonstrated that an optimal equilibrium of supply and demand exists, the guiding influence of Smith’s invisible hand in moving markets toward such a balance has not been shown. The dubious belief that markets actively move toward an equilibrium has been used by proponents of deregulation, who insist that removing government interventions promotes economic strength, and the presumption of its accuracy has prevented some leaders and economists from identifying critical signs of impending crises. The general equilibrium theory presents an optimistic view of self-correction that has not been borne out by actual economic conditions—a defect that calls into question Smith’s antecedent hypotheses.
Despite the ubiquity of this model in both popular and scholarly thinking, there is no evidence for its truth. Although academic economists have demonstrated that an optimal equilibrium of supply and demand exists, the guiding influence of Smith’s invisible hand in moving markets toward such a balance has not been shown. The dubious belief that markets actively move toward an equilibrium has been used by proponents of deregulation, who insist that removing government interventions promotes economic strength, and the presumption of its accuracy has prevented some leaders and economists from identifying critical signs of impending crises. The general equilibrium theory presents an optimistic view of self-correction that has not been borne out by actual economic conditions—a defect that calls into question Smith’s antecedent hypotheses.
1. The author of the passage implies which of the following regarding the originators of the general equilibrium theory?
A. There is ample evidence to support the basis of the theory.
B. They developed the theory sometime in the eighteenth century.
C. Their theories were immediately popular among the general public.
D. They were aware of Smith’s beliefs about the relationship between individual actions and the economy.
E. Some of them worked closely with Smith during the time in which he formulated his theory.
A. There is ample evidence to support the basis of the theory.
B. They developed the theory sometime in the eighteenth century.
C. Their theories were immediately popular among the general public.
D. They were aware of Smith’s beliefs about the relationship between individual actions and the economy.
E. Some of them worked closely with Smith during the time in which he formulated his theory.
2. The author of the passage is primarily concerned with
A. exploring the argument for economic regulation
B. questioning the foundation of the general equilibrium theory
C. defending Smith’s beliefs with supporting evidence
D. asserting that market forces naturally maintain balance
E. comparing several economic theories
A. exploring the argument for economic regulation
B. questioning the foundation of the general equilibrium theory
C. defending Smith’s beliefs with supporting evidence
D. asserting that market forces naturally maintain balance
E. comparing several economic theories
3. It can be inferred from the passage that defenders of the general equilibrium theory would most likely regard economic regulations as
A. imperative
B. catastrophic
C. salutary
D. insufficient
E. unnecessary
A. imperative
B. catastrophic
C. salutary
D. insufficient
E. unnecessary
RC Butler 2022 - Practice Two RC Passages Everyday.
Passage # 112 Date: 17-Mar-2022
This question is a part of RC Butler 2022. Click here for Details
Passage # 112 Date: 17-Mar-2022
This question is a part of RC Butler 2022. Click here for Details
05 Jun 2022, 19:25
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05 Jun 2022, 23:25
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Ghostrider3147
Official Explanation
3. It can be inferred from the passage that defenders of the general equilibrium theory would most likely regard economic regulations as
Difficulty Level: 550
Explanation
The subject of the question is how defenders of the general equilibrium theory…regard economic regulations and the task of the question is referenced by the word inferred. This is an inference question. Determine what the passage says about the subject. The passage states that the belief that markets actively move toward an equilibrium has been used by proponents of deregulation, who insist that removing government interventions promotes economic strength. So, defenders of the general equilibrium theory most likely regard regulation as ineffective. Evaluate the answer choices individually, looking for one that reflects this idea.
Choice (A) is a reversal of the information in the passage and the opposite of “ineffective,” so eliminate (A).
Choice (B) is an example of extreme language, as the passage does not support the idea that defenders see regulation as catastrophic. Eliminate (B).
Choice (C) is a reversal of the information in the passage as salutary means producing a good effect. Eliminate (C).
Choice (D), insufficient, is a reversal of the information in the passage. Eliminate (D).
Choice (E) is a good match for “ineffective.”
The correct answer is (E).
Difficulty Level: 550
Explanation
The subject of the question is how defenders of the general equilibrium theory…regard economic regulations and the task of the question is referenced by the word inferred. This is an inference question. Determine what the passage says about the subject. The passage states that the belief that markets actively move toward an equilibrium has been used by proponents of deregulation, who insist that removing government interventions promotes economic strength. So, defenders of the general equilibrium theory most likely regard regulation as ineffective. Evaluate the answer choices individually, looking for one that reflects this idea.
Choice (A) is a reversal of the information in the passage and the opposite of “ineffective,” so eliminate (A).
Choice (B) is an example of extreme language, as the passage does not support the idea that defenders see regulation as catastrophic. Eliminate (B).
Choice (C) is a reversal of the information in the passage as salutary means producing a good effect. Eliminate (C).
Choice (D), insufficient, is a reversal of the information in the passage. Eliminate (D).
Choice (E) is a good match for “ineffective.”
The correct answer is (E).
