Macroeconomics: Principles, Problems, & Policies
Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 2, Problem 5RQ
To determine

Identify the given examples.

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In your own words, explain the concept of the “invisible hand” as it relates to economic theory. Why is it that an entrepreneur with seemingly selfish motives can create benefits for the larger society? Why is this a benefit that arises from capitalism and not from other economic systems?
McDonald’s hamburgers are everywhere! They can be purchased in cities and suburbs, on beaches, in amusement parks and sports stadiums. Families with sick children can stay in Ronald McDonald Houses located close to the hospital where the children are receiving treatment. Ray Kroc, the founder, started with one restaurant in 1955, and had 2500 more by 1960.   How does the story of the founding and growth of McDonald’s illustrate Adam Smith’s invisible hand theory?
Why are truly global companies often seen as “evil”? What can be done to help them create the “Good Guy” image? Strikes in China are becoming common (e.g., a recent strike at Honda factories that led to a 25% wage increase). How does increasing wages in China affect the US (wages, prices, employment, wealth, etc)?
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