WORLD HISTORY

Detailed explanation-1: -Adam Smith Often referred to as the Father of Economics, Smith explained the concept of supply and demand as an “invisible hand” that naturally guides the economy. According to Smith, the invisible hand is the automatic pricing and distribution mechanisms in the economy.

Detailed explanation-2: -The central thesis of Smith’s The Wealth of Nations is that our individual need to fulfill self-interest results in societal benefit. He called the force behind this fulfillment the invisible hand.

Detailed explanation-3: -Smith is most famous for his 1776 book, “The Wealth of Nations.” Smith’s writings were studied by 20th-century philosophers, writers, and economists. Smith’s ideas–the importance of free markets, assembly-line production methods, and gross domestic product (GDP)–formed the basis for theories of classical economics.

Detailed explanation-4: -The first law of supply and demand. Smith said that prices and profits depended on both the amount of avaliable goods and the demand for those goods. If an item was scarce and in great demand, people would pay a high price for it and profits would rise.