Question

Please help its due TODAY!!!!!

2. Explain the theory of capitalism as defined by Adam Smith, including the factors of supply and demand. How does capitalism contrast with the mercantilist system pursued by European countries during the Age of Exploration? (5 points)

Answer 1

Adam Smith argued against mercantilism, which at that time was a main component of capitalism. Mercantilism is an idea that heavily promotes government involvement in trade and business, as opposed to allowing merchants and business people to keep track of themselves. This was fundamentally opposed to the idea of capitalism, which is that the free market is allowed to govern themselves, in accordance with laws. He proposed an invisible hand idea, which would allow free markets to regulate themselves through the ideas of competition, and supply and demand.

Step-by-step explanation:

Answer 2

Step-by-step explanation:

On March 9, 1776, "An Inquiry into the Nature and Causes of the Wealth of Nations"—commonly referred to simply as "The Wealth of Nations"—was first published.1 Smith, a Scottish moral philosopher by trade, wrote the book to describe the industrialized capitalist system that was upending the mercantilist system. Mercantilism held that wealth was fixed and finite, and that the only way to prosper was to hoard gold and tariff products from abroad. According to this theory, nations should sell their goods to other countries while buying nothing in return. Predictably, countries fell into rounds of retaliatory tariffs that choked off international trade.