Adam Smith wrote that
A) the economic problems of eighteenth-century Britain were in part caused by overspecialization.
B) the government should control the economy with an invisible hand.
C) the pursuit of private self-interest tends to promote the public interest.
D) the owners of resources should be given subsidies to induce them to employ those resources in the most efficient way.
E) eighteenth-century Britain needed a better-planned economy.

Question

Quizplus · Accepted Answer

Adam Smith is considered the father of modern economics and he believed that the pursuit of self-interest by individuals and businesses would lead to overall economic prosperity, as it would encourage competition and innovation. This is commonly referred to as the "invisible hand" and is the main message of his book "The Wealth of Nations." Option A is partly correct as Smith did argue against overspecialization in the economy, but it is not his main message. Option B, D, and E are incorrect as Smith believed that government intervention in the economy should be limited and that subsidies and planning were not necessary for economic growth.

Adam Smith Wrote That