Adam smith demonstrated that each individual in pursuing his self-good was led as if by an invisible hand to achieve the best good of all the society Adam Smith’s book ‘Wealth of Nations’ highlights some of the most prominent developments in classical economists. Classical economic theory developed shortly after the development of western capitalism and the industrial revolution and nearly all classical economists rejected government interference in exchanges preferring a looser market strategy. Capitalism, based on the agreement of classical economists, more so Adam Smith, is an economic system in which capital goods or all factors of production are owned by private individuals or businesses and the production of goods and services is based on the supply and demand in the general market rather than through central planning. One of the most enduring contributions of classical economists is the central place it gives to free trade in promoting economic development. This is a belief derived from Adam Smith ideas about the benefits of specialization. Adam Smith believed that everyone should specialize in making things that they are best at producing and trade at what others are better at producing. This is the absolute advantage theory. Adam Smith was highly critical of mercantilism who believed that countries declared their wealth based on the value of their gold and silver deposits. He argued that countries should be evaluated based on their levels of production and commerce, sentiments that created the basis of measuring a country’s wealth based on a metric Gross Domestic Product
Dana05 answered the question on July 3, 2019 at 11:17
- What is a theory?(Solved)
What is a theory?
Date posted: July 3, 2019. Answers (1)
- Give any seven characteristics of less developed countries (Solved)
Give any seven characteristics of less developed countries
Date posted: July 3, 2019. Answers (1)
- Highlight some of the side effects of economic growth and economic development (Solved)
Highlight some of the side effects of economic growth and economic development
Date posted: July 3, 2019. Answers (1)
- State the changes that a country must experience during economic transformation (Solved)
State the changes that a country must experience during economic transformation
Date posted: July 3, 2019. Answers (1)
- Briefly explain the concept of economic transformation (Solved)
Briefly explain the concept of economic transformation
Date posted: July 3, 2019. Answers (1)
- What is underdevelopment as used in economic development (Solved)
What is underdevelopment as used in economic development
Date posted: July 3, 2019. Answers (1)
- Discuss any five obstacles to economic growth and economic development (Solved)
Discuss any five obstacles to economic growth and economic development
Date posted: July 3, 2019. Answers (1)
- Highlight the disadvantages of using social indicators as a measure of economic development (Solved)
Highlight the disadvantages of using social indicators as a measure of economic development
Date posted: July 3, 2019. Answers (1)
- Identify the disadvantages of Gross Domestic Product per capita and Gross National Product per capita (Solved)
Identify the disadvantages of Gross Domestic Product per capita and Gross National Product per capita
Date posted: July 3, 2019. Answers (1)
- State the advantages of Gross Domestic Product per capita and Gross National Product per capita (Solved)
State the advantages of Gross Domestic Product per capita and Gross National Product per capita
Date posted: July 3, 2019. Answers (1)
- Highlight the problems associated with using Gross Domestic Product and Gross National Product as indicators of economic development (Solved)
Highlight the problems associated with using Gross Domestic Product and Gross National Product as indicators of economic development
Date posted: July 3, 2019. Answers (1)
- Give the definition of net property returns from abroad(Solved)
Give the definition of net property returns from abroad
Date posted: July 3, 2019. Answers (1)
- Give the definition Purchasing Power Parity (Solved)
Give the definition Purchasing Power Parity
Date posted: July 3, 2019. Answers (1)
- How is the Gross Domestic Product deflator calculated?(Solved)
How is the Gross Domestic Product deflator calculated?
Date posted: July 3, 2019. Answers (1)
- Give the definition of Gross Domestic Product deflator (Solved)
Give the definition of Gross Domestic Product deflator
Date posted: July 3, 2019. Answers (1)
- What is a base year?(Solved)
What is a base year?
Date posted: July 3, 2019. Answers (1)
- Differentiate between nominal Gross Domestic Product and real Gross Domestic Product(Solved)
Differentiate between nominal Gross Domestic Product and real Gross Domestic Product
Date posted: July 3, 2019. Answers (1)
- Why is it important to adjust the Gross Domestic Product figure?(Solved)
Why is it important to adjust the Gross Domestic Product figure?
Date posted: July 3, 2019. Answers (1)
- Identify the three approaches in which a country can compute Gross Domestic Product (Solved)
Identify the three approaches in which a country can compute Gross Domestic Product
Date posted: July 3, 2019. Answers (1)
- Describe any three indicators of economic development (Solved)
Describe any three indicators of economic development
Date posted: July 3, 2019. Answers (1)