Which of the following characterizes the economic system favored by Adam Smith? Profit is not the main goal of business. Mercantilism creates a favorable balance of trade. Supply and demand regulate business. The government intervenes in the economy when needed.

Question

History

Ramiro Cohen

26 March, 17:35

Which of the following characterizes the economic system favored by Adam Smith? Profit is not the main goal of business. Mercantilism creates a favorable balance of trade. Supply and demand regulate business. The government intervenes in the economy when needed.

+1

Answers (2)

Know the Answer?

Kenny Gibbs · Answer 1

choice number 3

Leonardo Bowman · Answer 2

The correct answer is: " Supply and demand regulate business"

According to the central thesis of The Wealth of Nations, the key to social welfare lies in economic growth, which is enhanced through the division of labor and free competition. According to this thesis, the division of labor, in turn, deepens as the extension of the markets and therefore specialization expand. For his part, Adam Smith considers free competition as the most ideal means of economics, stating that the contradictions engendered by the laws of the market would be corrected by what he called the "invisible hand" of the system.

In The Wealth of Nations, Smith assumes, in general, that the demand is relatively fixed in the short and medium term (depending ultimately on the number of people), and that, consequently, it is only the offer that makes the price go up or down