Adam Smith

What does the idea of ‘the invisible hand’ in Smith’s Wealth of Nations refer to?

• the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest

• Protectionism

• The idea of French Physiocrats

In his first book, The Theory of Moral Sentiments, he described the natural principles that govern..........

• justice

• morality

• animal behaviour

The total value of goods and services produced by a country in one year is called ............

What was Smith's educational background?

• Economics at Harvard

• Economics at Oxford

• Social Philosophy at the University of Glasgow

What book, written by Smith, is considered by many to be the cornerstone of capitalism and was Smith's most famous work?

• The Wealth of Nations

• Capitalism and its Implications

• Economics and Political Systems

At what age, did Smith pass away?

• 86 years old

• 76 years old

• 67 years old

Smith argued that a free exchange should be created because ...........

• countries can import goods

• it promotes fairness

• countries are better off from the exchange.

Theory of compensating wage differentia means that

• dangerous or undesirable jobs tend to pay higher wages as a way of attracting workers to these positions.

• an income level is determined by market dynamics, work experience, education and skill.

• the relationship between the availability of a particular product and the desire for that product has on its price.

Supply and demand means

• the idea that the price of goods and services depends on how much of something is being sold and how many people want to buy it

• an economic system with only a small amount of government control, in which prices and earnings are decided by the level of demand for, and production of goods and services

• the total value of goods and services produced by a country in one year

What type of economic system did Adam Smith support?

• a free market system

• mixed economic system

• planned economic system