lesson 4

How did Smith challenge the prevailing view of how nations build and acquire wealth?

He said that the economy actually developed from the bottom up rather than from the top down

Where was Karl Marx born?

Prussia

What do those who advocate laissez faire economics want government to do?

Refrain from any regulation of economic activity

Contrast how Adam Smith and Karl Marx believed economic decisions should be made.

Smith believed they should be spread as widely as possible throughout the economy, while Marx believed that a select few should make them.

What book did Karl Marx write with Friedrich Engels?

The Communist Manifesto

What book by Adam Smith was published in 1776

The Wealth of Nations

Marx divided society into what two classes?

The working class (proletariat) and the ownership class (bourgeoisie)

The prevailing economic philosophy when Adam Smith published The Wealth of Nations was what?

mercantilism

What question is the basic divide between capitalism and socialism?

who should make economic decisions?

Who is often called the father of modern economics?

Adam Smith