Question

Which of the following elements is most closely associated with Adam Smith's theory of capitalism?

A.The establishment of strong economic regulations
B.Limits on the government's role in economies
C.The creation of government-funded industries
D.The protection of workers' union rights

Answer 1

The answer is limits on the government’s role in economies (B).

Answer 2

B.Limits on the government's role in economies

Step-by-step explanation:

Adam Smith is considered the father of economic liberalism. In his book The Wealth of Nations, Smith bends to explain why nations thrive. Its main conclusion is that in seeking individual benefit, people contribute together for economic development. The role of the government in Adam Smith is to keep the economic environment prosperous for private enterprise to promote economic growth. Thus, government action is limited, government should not be an active player, because it is inefficient, but should only be the regulator and promoter of the economic environment.