NO, it will not because if it does then the government will not pay the security
Answer:
Smith argued that by giving everyone freedom to produce and exchange goods as they pleased, and opening the markets up to domestic and foreign competition, people's self-interest would promote greater purpose than government. Explanation:
AnswAnswer:
- Adam Smith’s major contributions to classical liberal economic theory were the concept of "THE INVISIBLE HAND"
- his view of government’s proper role in the economy was "NOT PARTICIPATION"
Explanation:
Adam Smith is considerate as the father of <u>capitalism</u>. His main contribution to the classical liberal economic theory was the concept of "THE INVISIBLE HAND" (introduced in the book <u>The Wealth of the Nation</u>): he developed the idea of the existence of an invisible hand which function is regulating the markets. <u>The markets will regulate by itself</u>, by the power of this "hand" and they will find the balance by the actions of the demand and supply.
Government proper role in the economy is limited: as "THE INVISIBLE HAND" regulates the markets (by the action of the supply and demand), the government action is to "<em>laissez-faire laissez passer</em>" (let things alone, let thing pass), it should not interfere or regulate business or industries. The G must let the private sector do without public intervention trying to regulate and controlling the private business.
The Government is like a referee, not as a participant in the economy. It must provide their population defense and laws to protect and contribute to a free society.
- Why did Henry Paulson propose the intervention of the Federal Reserve, which was subsequently enforced by the enactment of the The Emergency Economic Stabilization Act of 2008?
It was implemented by Treasury Secretary Henry Paulson. It consisted on a bailout to ensure the viability of the US financial system after the subprime mortgage crisis because massive defautls had already triggered the collapse of the investment bank Lehman Brothers. $700 billion were directed to purchase mortgage-based securities and other potentially dangerous assets, injecting liquidity to banks.
- In which manner is it similar to the measures implemented during the Great Depression?
Authorities are undertaking an interventionist stance in order to reverse the critical economic situation. Recession was faced by pumping public money into the system hence, by increasing public spending, aiming that it would subsequently lead to demand increases. Such solutions are therefore based on Keynesian economics, as it was the New Deal implemented by President Roosevelt in the 1930s.
- What is the 'Quantitative Easing' mechanism?
It is one of the actions that have been performed by the Fed since 2008. It is an expansionary monetary policty that consists on large asset purchases that would decrease interest rates and, in turn, boost public and private investments, consumption and, in general, the whole aggregate demand.
