Adam Smith Believed That Countries Would Prosper If Businesspeople Were

question 59

Multiple Choice

Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses,because businesspeople would make a profit by providing the goods,services and ideas that others in the economy wanted.This was called the:

• A)kinked demand theory.
• B)invisible hand.
• C)spending multiplier.
• D)demand accelerator.

Understand the importance and effects of consumer sovereignty, private ownership, and the role of prices in a market system.

Understand the principles of economic efficiency and the factors that contribute to it.

Comprehend the challenges and limitations of central planning in economic systems.

Recognize the role and motivations of entrepreneurs in a market system.

---

Definitions:

Phrenology

An outdated and discredited theory that the shape and contours of the skull could determine a person’s personality traits and mental abilities.

Relative Power

A concept describing the amount of influence or control one entity has in comparison to another within a particular context or relationship.

Skull

The bony structure in the head, containing the brain and supporting the facial structure.

Bumps And Indentations

Physical features characterized by raised or lowered areas on a surface, often felt through touch.