The "Invisible Hand" Described by Adam Smith Refers to the

question 57

Multiple Choice

The "invisible hand" described by Adam Smith refers to the

• A)allocative role of markets and market forces
• B)importance of government intervention and central planning
• C)actions of successful entrepreneurs in directing the economy
• D)role of monopolized industries in leading the nation
• E)value of religious belief in creating an ideal economy

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Definitions:

Accrual Basis

An accounting method that records income when earned and expenses when incurred, regardless of when the cash is received or paid.

Average Annual Gross Receipts

An average of a business's total gross income over a specified period, often used to determine tax reporting requirements or eligibility for small business tax concessions.

Complete Liquidation

The process of closing a business by selling all assets, paying off creditors, and distributing the remaining assets to shareholders.

Capital Gain

The profit from the sale of an asset or investment exceeding its purchase price, which is subject to taxation.