Adam Smith's economic theory is based on which of the following assumptions?

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Adam Smith's economic theory is based on the assumption that people will behave rationally as they pursue their interests. This is known as the "invisible hand" of the market, where individual self-interest and competition result in the best outcome for society as a whole. Smith did not address morality directly in his economic theory, but it can be argued that his belief in the power of self-interest to drive economic growth and prosperity implies that moral behavior is not necessary for economic success. However, this does not mean that morality is irrelevant to economic concerns as a whole.

Adam Smith's Economic Theory Is Based on Which of the Following