Adam Smith and the Wealth of Nations
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Questions and Answers

According to Adam Smith, how does the market mechanism coordinate the activities of economic actors?

  • Through government intervention
  • Through central planning
  • By individual pursuit of self-interest (correct)
  • By random chance
  • What did Karl Marx identify as the key driver of historical change in society?

  • Government policies
  • Technological advancements
  • Division of labor
  • Class struggle (correct)
  • Which Industrial Revolution wave was characterized by advancements in computers and partial automation?

  • Fourth IR
  • Third IR (correct)
  • First IR
  • Second IR
  • What did Thomas Malthus predict about income levels in relation to population growth?

    <p>Income will remain at subsistence level</p> Signup and view all the answers

    Which concept did Adam Smith strongly support in relation to economic activity?

    <p>Division of labor and specialization</p> Signup and view all the answers

    What was Karl Marx's view on the relationship between the working class and the capitalist class?

    <p>Exploitation of the working class by the capitalist class</p> Signup and view all the answers

    What was one of the implications of 'Malthus's Law'?

    <p>Economies are trapped in a low-income cycle.</p> Signup and view all the answers

    Why did Malthus suggest that unless there is technological improvement or an increase in resources, the population will tend to stay the same?

    <p>To explain the connection between resources and population dynamics.</p> Signup and view all the answers

    What is the significance of labour-saving and energy intensive production methods that emerged in the 18th and 19th centuries?

    <p>They increased labour productivity and wage rates.</p> Signup and view all the answers

    Why is it crucial for private property to be secure for capitalism to be dynamic?

    <p>Secure private property encourages innovation and investment.</p> Signup and view all the answers

    What role did labour productivity play in escaping the Malthusian trap?

    <p>Labour productivity enabled temporary increases in living standards.</p> Signup and view all the answers

    How did Malthus view subsistence levels during his time?

    <p>As living on the verge of starvation.</p> Signup and view all the answers

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