Basics about Adam Smith
What year was Adam Smith born?
1723
What does Laissez-Faire mean in english?
Let do
Give one characteristic of a capitalism
individuals/Business can own capital goods, production of goods is based on the supply and demand of the market
What was Adam Smith's Prime Example to explain the Division of Labor?
Pin Factory Example
Name 1 of Adam Smith’s most known work?
Invisible hand, Wealth of Nations, The Theory of Moral Sentiment
Why does the government need to take some part in the economy?
Because of the Free rider-effect
What were Adam Smith's beliefs ?
A countries wealth should not be decided by how much gold/ silver it had, but rather the goods/ services produced (GDP)
What two factors must be equal so that the invisible hand is true?
Self Interest=Competition
Briefly describe what is Mercantilism?
An economic theory during the 16-18th century where the government strictly regulates and restricts the countries imports to promote domestic industries, as well as increasing reserves of gold and silver
State an example of how the factors of production will shift to society and economies without any motivation
When business fails the workers find new jobs, the capitals are sold to other companies and a new business will open up in the former store's location.
Other examples are possible