Question

What is the main inference that can be drawn from Adam Smith’s book The Wealth of Nations?

Answer 1

The correct answer is C: A free-market economy works well only without the government’s interference.

Answer 2

The correct answer is:

C. A free-market economy works well only without the government's interference.

Explanation:

Adam Smith wrote in 1776 The Wealth of Nations which was the first one to talk about Capitalism and the benefits of a free-market economy. Smith stated in his book that if the government doesn't interfere in the market (banning foreign products or raising taxes making products more expensive), people would create better products to gain a bigger profits for themselves and that consumers would be able to have better choices and prices to satisfy the demand.

Smith also pointed out the flaws of the Mercantile system, the need of property rights, and the necessary evil of social gap divisions in order to create a wealthy economy. The Wealth of Nations created the system of Capitalism and marked the beginning of economics as a science.