LITERATURE QUESTIONS
MISCELLENEOUS QUESTIONS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the freedom of commerce is at the basis of a united and modern nation and serves the purpose of increasing the wealth of the government
|
|
|
trade can’t be organized by a central government but must rest on the freedom of the individual
|
|
|
national well being is fostered by the free operation of trade with a minimum of government taxation
|
|
|
the government must control the trade with other countries to prevent civil unrest and inequality
|
Detailed explanation-1: -Smith introduced the concept that free trade would benefit individuals and society as a whole. He believed that governments should not impose policies that interfered with free trade, domestically and abroad.
Detailed explanation-2: -Smith’s best-known ideas formed the basis of economic theory, including the invisible hand theory (the idea that free-markets coordinate themselves), the division of labor (the idea that people should specialize in specific tasks), and the measurement of economic activity (Gross Domestic Product).
Detailed explanation-3: -In fact, he believed that government had an important role to play. Like most modern believers in free markets, Smith believed that the government should enforce contracts and grant patents and copyrights to encourage inventions and new ideas.
Detailed explanation-4: -[2] Smith argued that when one nation is more efficient than another country in producing a product, while the other nation is more efficient at producing another product, then both nations could benefit through trade.