ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Karl Marx was right about societies
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Command Economy is the best
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All societies should return to using traditional economies
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Economies work best when there is no government involvement
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Detailed explanation-1: -We know Adam Smith today as the father of laissez faire ("to leave alone") economics. This is the idea that government should leave the economy alone and not interfere with the “natural course” of free markets and free trade.
Detailed explanation-2: -Adam Smith was among the first philosophers of his time to declare that wealth is created through productive labor, and that self-interest motivates people to put their resources to the best use. He argued that profits flowed from capital investments, and that capital gets directed to where the most profit can be made.
Detailed explanation-3: -Smith rejected government interference in market activities. He believed that a government’s three functions should be to protect national borders, enforce civil law, and engage in public works (e.g., education).
Detailed explanation-4: -Does Adam Smith support an economic system based on government control or individual decision-making? Why? Adam Smith supports an economic system based on individual decision-making. He believes that every man should pursue in what interests them.
Detailed explanation-5: -Dome (1994) states that Smith’s theory of economic growth consists of a rise in the productivity of labour by means of the division of labour, and an increase in productive labour by way of capital accumulation.