In the Wealth of Nations, Adam Smith Maintains That

question 38

Multiple Choice

In The Wealth of Nations, Adam Smith maintains that

• A) mercantilism is the most efficient economic system.
• B) a welfare state ought to be established.
• C) granting monopolies to successful businesses is the best way to promote the wealth of a nation.
• D) the best way to promote the public interest is to let people pursue their private interests.
• E) economic competition usually leads to civil war as people fight for profits.

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Definitions:

Downside Risk

The potential loss that could occur in an investment due to adverse price movements.

Geometric Average Return

A method for calculating the average rate of return on an investment, which accounts for the effects of compound interest.

Rates of Return

The gains or losses on an investment over a specified period, expressed as a percentage of the investment's cost.

Normal Distribution

A bell-shaped frequency distribution curve that is symmetrical about the mean, showing how data points, like stock returns, are dispersed or spread out.