Which of the following is true of Adam Smith's view of markets and resource allocation?

Question

Quizplus · Accepted Answer

Adam Smith believed that markets allowed for decentralized decision making, meaning that individuals and businesses were free to make their own choices regarding production and consumption. This, in turn, led to a more efficient allocation of resources because market forces determined prices and production levels based on supply and demand. Smith did not believe that markets discourage innovation, as innovation is often driven by profit motives within markets. Additionally, efficient markets do not necessarily depend on the goodwill of individuals, as competition within markets can lead to a self-regulating system. While markets may not always allocate resources perfectly or fairly, Smith saw them as the best available option for resource allocation.

Which of the Following Is True of Adam Smith's View