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