When People Act in Their Self-Interest, What Typically Happens in a Market

question 95

Multiple Choice

When people act in their self-interest, what typically happens in a market system, according to Adam Smith?

• A) They help only themselves.
• B) They harm others.
• C) They help others, but not as much as they would have if they were not self-interested.
• D) They help others even more than when they seek to help others.

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Definitions:

Adjusting Entries

Accounting records created at the conclusion of an accounting cycle to distribute revenues and expenses to the period they truly belong.

Cash Flow Statement

A cash flow statement is a financial report that provides aggregate data regarding all cash inflows and outflows a company receives.

Deferred Expense

Deferred Expense is an expenditure that is made in advance and included in assets to be used or consumed in a future period.

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, which are expensed over the period the insurance coverage relates to.