Adam Smith's Beliefs on National Prosperity Could Be Best Summarized

question 57

Multiple Choice

Adam Smith's beliefs on national prosperity could be best summarized by which of the following statements?

• A) The protectionist role of the government through tariffs is essential.
• B) Relying on people as a strategic asset is a more productive use of human capital.
• C) National prosperity is solely based on natural resources.
• D) Autocratic governments with large landowners are ideal.

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Definitions:

Deficit

The amount by which government expenditures exceed revenue over a particular period, leading to borrowing or debt.

Japan

An island nation in East Asia, known for its rich culture, technological advancements, and significant economic power.

Equilibrium GDP

The level of GDP (Gross Domestic Product) at which total demand (aggregate demand) and total supply (aggregate supply) in the economy are equal, leading to an economic equilibrium.

Full Employment GDP

The output level of goods and services at which the economy's labor force is fully employed, indicating an optimal level of production without excessive inflation.