Question

Explain how an economic event in the 18th century influenced the economic ideas of Adam Smith .

Answer 1

Answer:

Adam Smith was an 18th-century Scottish economist, philosopher, and author who is considered the father of modern economics. Smith argued against mercantilism and was a major proponent of laissez-faire economic policies. In his first book, "The Theory of Moral Sentiments," Smith proposed the idea of an invisible hand—the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest.

Explanation:

Smith is also known for creating the concept of gross domestic product (GDP) and for his theory of compensating wage differentials. 2 According to this theory, dangerous or undesirable jobs tend to pay higher wages as a way of attracting workers to these positions.3 Smith's most notable contribution to the field of economics was his 1776 book, "An Inquiry into the Nature and Causes of the Wealth of Nations."