18A: Adam Smith & the Free Enterprise System
Private ownership
When factors of production (like land & resources) are owned & controlled by individuals, rather than the government
Wealth of Nations
a book written by Adam Smith in favor of a market or economy with little to no government interference
Supply & demand
in a free enterprise (capitalist) system, prices and wages are determined by _________________.
Voluntary Exchange
the principle that people may decide what, when, and how they want to buy and sell
Invisible hand
A term coined by Adam Smith to describe the idea that self-interested behavior by individuals can lead to positive social outcomes
Demand
Consumer willingness and ability to buy products
Free Enterprise
Economic system where private businesses compete with little government interference
Self-interest
In a free enterprise system, __________________ drives the economic success of a business and ultimately a country.
Adam Smith
Seen as the Father of Capitalism (aka free enterprise). Published his thoughts on economies in The Wealth of Nations in 1776.
Supply
The number of goods available for sale by a business
Capitalism
the free enterprise system is more commonly know as ___________________.
Laissez Faire
the idea that government should play as small a role as possible in economic affairs; minimizing interference and taxation