What Did Adam Smith Argue in the Wealth of Nations

question 97

Multiple Choice

What did Adam Smith argue in The Wealth of Nations?

• A) Regulation of trade was the cornerstone of government.
• B) The "invisible hand" of the free market directed economic life more effectively and fairly than governmental intervention.
• C) Sacrificing for the public good was necessary for a thriving economy.
• D) Unregulated economic freedom would lead to the destruction of social harmony.
• E) A free market would concentrate wealth in the hands of very few elites.

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Definitions:

Marginal Propensity

The fraction or portion of an additional amount of income that is spent on consumption, saving, or other economic activities.

Alternative Hypotheses

A statement in hypothesis testing that is accepted if the evidence suggests that the null hypothesis is false.

Null Hypothesis

The default position that there is no association between two measured phenomena, or no difference among groups being compared.

P-Value

The probability of observing test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is true.