Adam Smith's Economic Theory of "Laissez-Faire" Called for Governments

question 9

Multiple Choice

Adam Smith's economic theory of "laissez-faire" called for governments

• A)to regulate their economies strictly.
• B)to leave individuals alone to choose what is in their best economic interests.
• C)to regulate trade with colonies,yet allow freedom for trade with other European countries.
• D)to regulate strictly only the most profitable trade.
• E)to regulate trade strictly only when threatened by another European country.

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Definitions:

Coupon Bond

A type of bond that pays the holder a fixed interest rate (coupon) over its lifetime, and the principal amount is repaid at maturity.

Yield To Maturity

Yield to Maturity (YTM) is the total anticipated return on a bond if the bond is held until it matures, accounting for interest payments and principal repayment.

Par Value

Par value is the face value of a bond or the stock value stated in the corporate charter, which signifies the minimum price that the securities can be issued for.

Coupon Rate

The interest rate on a bond, expressed as a percentage of the bond's face value, paid by the bond issuer to the bondholder.