Question

FIRST SCENARIO: The economy has taken a turn for the worse. The president believes the government should get the economy moving again. According to the president, the problem is that markets are flawed and they do not protect consumers. Therefore, the government should study the problem, decide what must be produced, and pass laws that require individuals and businesses to follow the government’s informed advice.
Opponents of the president see a different world. They say central planners do not have enough information to organize an economic system. Markets may seem chaotic, but prices act as signals and respond quickly to fragmented information in a dynamic economy. These price signals provide consumers, businesses, and resource owners with the information they need to coordinate action. In addition, incentives matter. Government programs often create incentives that have unintended consequences. The economy will grow if we stay the course.

What would Adam Smith say? Why?

SECOND SCENARIO: The Save Our Jobs Coalition is working to pass a law that would penalize businesses that move jobs overseas. In addition, the law would require tariffs to be imposed on imported goods that are cheaper than similar goods made in the United States. Many corporations and small businesses are in favor of raising tariffs.

Opponents of the proposed law believe freer trade promotes economic progress because it makes more sense to buy goods from a country that makes them less expensively and use the country‟s resources to make other products. A tariff may save jobs in a particular industry, but other jobs will not be created. Furthermore, prohibiting American companies from having operations overseas means the companies will be reluctant to hire people domestically and will lay off highly paid workers in their quest to cut costs.

What would Adam Smith say? Why?

THIRD SCENARIO: Business lobbyists believe the current government is anti-business. They also think competition is making it difficult to make a profit. They believe it’s time for the government to help businesses through subsidies and incentives for consumers to buy their products. They also want the government to suspend antitrust laws and make new rules and regulations that would make it more difficult for small businesses to compete unfairly with large, well-established corporations. According to the lobbyists, helping business will improve everyone’s lives.

What would Adam Smith say? Why?

FOURTH SCENARIO: “Stop Government Now” is a group that believes there is no legitimate role for government except providing for police and fire protection. Members believe almost all governmental functions should be privatized. Markets should not be regulated. Members say markets may be greedy, but free markets make us all more moral.

What would Adam Smith say? Why?

MUST WRITE A PARAGRAPH FOR EACH SCENARIO

Answer 1

What  Adam Smith will say based on the scenarios are given below;

In regards to the first scenario, the thing that  Adam Smith would say that the government should make use of  tax on its people as well as  Government programs that will make the market to be better.

What would Adam Smith say?

SECOND SCENARIO: . There should be the raising tariffs as well as allowing American companies to have operations overseas as they are all for the betterment of the people.

THIRD SCENARIO:  Adam Smith is not in support of suspending antitrust laws as government is suppose to work for the betterment of the people and not to make life heard.

FOURTH SCENARIO:  Adam Smith says that privatized is not the best way because government  have legitimate role to work for the interest of his people.

Therefore,  In regards to the first scenario, the thing that  Adam Smith would say that the government should make use of  tax on its people as well as  Government programs that will make the market to be better.

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