Question

To better understand Adam Smith’s observations about the benefits of free markets that still exist today, read this excerpt from Wealth of Nations. Then answer the questions that follow.

Which sentence from the passage supports the following statement? A market economy encourages more and better production of goods.
A. "In a market-driven economy, competition spurs innovation and efficiency."
B. "Free trade allows for the specialization of labor, leading to increased productivity."
C. "Government intervention in the market stifles natural economic growth."
D. "A laissez-faire approach leads to optimal resource allocation."

Answer 1

The sentence that supports the statement 'A market economy encourages more and better production of goods' is 'Free trade allows for the specialization of labor, leading to increased productivity.'

Step-by-step explanation:

The sentence from the passage that supports the statement “A market economy encourages more and better production of goods” is B. “Free trade allows for the specialization of labor, leading to increased productivity.”

This sentence explains how free trade enables individuals and businesses to focus on producing goods and services in which they have a competitive advantage. By specializing, they can increase productivity and produce more goods, leading to better production in a market economy.