Which of the Following Is Not an Idea Advocated by Adam

question 86

Multiple Choice

Which of the following is not an idea advocated by Adam Smith?

• A) Businesspersons conspiring to fix prices are a threat to the price system.
• B) Pursuit of private self interest with an invisible hand is the best way to promote the public interest.
• C) Government should control the economy.
• D) The government should provide for national defense and little else.

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Definitions:

Dividend Payout

The portion of a company's earnings paid to shareholders as dividends, often expressed as a percentage of the company's total earnings.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged, intended to minimize risk.