Question

The basic tenets of capitalism were set forth in a well-known book, The Wealth of Nations, written by?

1) Adam Smith
2) Karl Marx
3) John Maynard Keynes
4) Milton Friedman

Answer 1

The basic principles of capitalism were outlined by Adam Smith in his seminal work, The Wealth of Nations, which promotes the concepts of a free market, the division of labor, and the 'invisible hand' guiding supply and demand with minimal government intervention.

Step-by-step explanation:

The basic tenets of capitalism were set forth in the well-known book, The Wealth of Nations, written by Adam Smith. Published in 1776, Smith's book is considered a foundational work in classical economics and outlines key principles of a free market economy. Smith introduced important concepts like the division of labor, productivity, and the 'invisible hand' – an unseen force that maintains balance between supply and demand in the market. The Scottish economist and philosopher argued for minimal governmental interference in the economy (laissez-faire) and stated that a free market would naturally organize itself efficiently through mutual self-interests of individuals. This work forms the basis for the economic system of capitalism that is prevalent in many countries around the world today.