ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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public support for the government
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producers only
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growth
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consumers only
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Detailed explanation-1: -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-2: -Adam Smith described self-interest and competition in a market economy as the “invisible hand” that guides the economy. This episode of the Economic Lowdown Podcast Series explains these concepts and their importance to our understanding of the economic system.
Detailed explanation-3: -Smith advocated for free markets and believed that government intervention was not necessary to control the economy as the forces of market competition would allow the economy to function in the most efficient way; this is the notion of the invisible hand.
Detailed explanation-4: -Smith was the first to realise that economics should not only be concerned with the production of wealth but the distribution of it too. In large part because of his ideas, England overturned the Corn Laws and went on to become the dominant economic power in Europe during the Industrial Revolution.