According to Adam Smith, how did government regulation of trade limit economic growth under the system of mercantilism?

Answers

Answer 1

What was the most important document published in 1776? The Declaration of Independence is the easy answer for Americans, but many would argue that Adam Smith's "The Wealth of Nations" had a bigger and more global impact.

On March 9, 1776, "An Inquiry into the Nature and Causes of the Wealth of Nations" (commonly referred to as simply "The Wealth of Nations") was first published. Smith, a Scottish philosopher by trade, wrote the book to upend 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, this meant 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. (For related reading, see: The Basics Of Tariffs And Trade Barriers.)

The Invisible Hand

The core of Smith's thesis was that humans' natural tendency toward self-interest (or in modern terms, looking out for yourself) results in prosperity. Smith argued that by giving everyone freedom to produce and exchange goods as they pleased (free trade) and opening the markets up to domestic and foreign competition, people's natural self-interest would promote greater prosperity than with stringent government regulations. Smith believed humans ultimately promote public interest through their everyday economic choices. “He (or she) generally, indeed, neither intends to promote the public interest nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention,” states Smith in “An Inquiry Into The Nature And Causes Of The Wealth Of Nations” (1776). This free-market force became known as the invisible hand, but it needed support to bring about its magic.

What is the Effect of the Invisible Hand on the Government?

The automatic pricing and distribution mechanisms in the economy—which Adam Smith called an "invisible hand"—interacts directly and indirectly with centralized, top-down planning authorities. However, there are some meaningful conceptual fallacies in an argument that is framed as the invisible hand versus the government.

The invisible hand is not actually a distinguishable entity. Instead, it is the sum of many phenomena that occur when consumers and producers engage in commerce. Smith's insight into the idea of the invisible hand was one of the most important in the history of economics and remains one of the chief justifications for free market ideologies. The invisible hand theorem (at least in its modern interpretations) suggests that the means of production and distribution should be privately owned, and that if trade occurs unfettered by regulation, in turn, society will flourish organically. These arguments are naturally competitive with the concept and function of government.

The government is not serendipitous; it is prescriptive and intentional. Politicians, regulators and those who exercise legal force (such as the courts, police, and military) pursue defined goals through coercion. However, in contrast, macroeconomic forces—supply and demand, buying and selling, profit and loss occur voluntarily until government policy inhibits or overrides them. In this sense, it is more accurate to suggest that government affects the invisible hand, not the other way around.

However, it is the absence of market mechanisms that frustrates government planning. Some economists refer to this as the economic calculation problem. When people and businesses individually make decisions based on their willingness to pay money for a good or service, that information is captured dynamically in the price mechanism. This, in turn, allocates resources automatically towards the most valued ends.

When governments interfere with this process, unwanted shortages and surpluses tend to occur. Consider the massive gas shortages in the United States during the 1970s. The then newly-formed Organization of Petroleum Exporting Countries (OPEC) had cut production to raise oil prices. In response to this, the Nixon and Ford administrations introduced price controls to limit the cost of gasoline to American consumers. The goal was to make cheap gas available to the public.



Answer 2

Final answer:

Adam Smith criticized the mercantilist system for its heavy government regulation of trade, arguing it stifled economic growth. He believed in minimal government intervention, allowing market forces and competition to drive prosperity and efficiency in the economy. Smith's ideas marked a significant shift towards the principles of free trade and market regulation.

Explanation:

According to Adam Smith, government regulation of trade under the mercantilist system significantly limited economic growth. Smith critiqued mercantilism, asserting that it was based on the flawed premise that economic gain for one nation necessitated loss for another.

He championed the idea that trade should be mutually beneficial, fostered by the forces of supply and demand rather than restrictive governmental policies. Government regulations such as monopolies, high tariffs, and bans on certain imports were aimed at protecting domestic industries but, according to Smith, these measures ultimately harmed the economy by keeping prices artificially high and stifling efficiency and innovation.

Smith argued for minimal government intervention in the economy, believing that economic growth was best achieved through competition and the natural regulation of market forces. He contended that the government's role should be limited to providing essential services that supported business, like national defense and infrastructure, rather than interfering in the market dynamics. This perspective laid the groundwork for the classical liberal economics that emphasized the benefits of free trade and the self-regulating nature of the market.


Related Questions


What effect did the D-Day invasion have on World War II?

It diverted attention from the truly important war in the Pacific.

It established France as one of the world’s superpowers.

It forced the Germans to fight the war on two fronts.

It turned the war in favor of the Germans.


NO BS ANSWERS I WILL REPORT THEM AND YOU WON'T GET TO KEEP THE POINTS

Answers

It forced the Germans to fight the war on two fronts.

The D-Day invasion had a significant and positive effect on World War II by forcing the Germans to fight on two fronts. Therefore, option C is correct.

What was the D-Day invasion?

The D-Day invasion, also known as the Normandy landings, was a major military operation during World War II, launched on June 6, 1944 by the Allied forces in Western Europe.

The operation involved the landing of thousands of troops, mostly from the United States, Great Britain, and Canada, on the beaches of Normandy, France, in order to establish a foothold on the continent and begin the liberation of Western Europe from Nazi Germany.

The operation involved months of planning and preparation, including the construction of artificial harbors and the deployment of troops and equipment. The invasion force consisted of over 156,000 Allied soldiers, sailors, and airmen, who were transported across the English Channel by a massive fleet of ships and supported by thousands of aircraft.

The invasion began with airborne assaults on strategic targets behind enemy lines, followed by a massive amphibious assault on five beaches, codenamed Utah, Omaha, Gold, Juno, and Sword. Despite facing heavy resistance from German troops, the Allied forces were able to establish beachheads on all five landing zones, and eventually secure a foothold on the continent.

The success of the D-Day invasion marked a major turning point in World War II, and paved the way for the eventual defeat of Nazi Germany.

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Whose views did the Democratic Republicans represent?

A) the loose constructivist's point of view

B) upper class, including merchants, manufactures, bankers and large land owners

C) lower class, including farmers, small shopkeepers, city workers and frontier settlers

D) the middle class, including government officials, blacksmiths and factory owners

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the right awnser is d 


hope this helped

How did the completion of the Transcontinental Railroad affect companies that made products?

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The completion of the Transcontinental Railroad affected companies making various products. Companies were able to ship products over long distances, for a cheap price(s). This helped the Transcontinental railroad bring an increase of profits towards companies.  

How did president wilson respond to the steel strike?

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Wilson tried to end the crisis by promising a national conference and urging the steel unions to seek a settlement of grievances.

What was the result of the Confederate attack on Fort Sumter, South Carolina, on April 12, 1861?

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Confederate victory, Confederacy captures Fort Sumter, Beginning of the American Civil War, and Star Spangled Banner. 

The correct answer is A) The Civil War began.

The result of the Confederate attack on Fort Sumter, South Carolina, on April 12, 1861, was that the Civil War began

Fort Sumpter was built in 1829 on an island located in Charleston Harbor, South Carolina. Union troops occupied Fort Sumter in 1860 because the state of South Carolina had decided to secede from the Union. On April 12, 1861, President Lincoln troops were taking supplies to the Fort, Southern General P.G.T. Beauregard attacked the Fort. Union General Robert Anderson surrendered and the Confederates secured the Fort.

The other options of the question were B) The union troops won. C) Abraham Lincoln freed the slaves. D) The battle ended without a real winner.

 The order of Earth's three eras from earliest to most recent is  A. Mesozoic era, Cenozoic era, Paleozoic era B. Cenozoic era, Mesozoic era, Paleozoic era C. Cenozoic era, Paleozoic era, Mesozoic era D. Paleozoic era, Mesozoic era, Cenozoic era

Answers

The correct order of Earth's three eras from earliest to most recent is Paleozoic era, Mesozoic era, and Cenozoic era, which is option D.

The order of Earth's three eras from earliest to most recent is the Paleozoic era, Mesozoic era, and then the Cenozoic era. These eras represent significant periods in Earth's history where different forms of life were dominant.

The Paleozoic era, which means 'ancient life', featured the evolution of fish, invertebrates, amphibians, and early reptiles. Following the Paleozoic, the Mesozoic era, known as the 'age of reptiles', was dominated by the presence of dinosaurs. The third era, the Cenozoic, known as the 'age of mammals', is where mammals became the predominant land-dwelling animals following a mass extinction event at the end of the Mesozoic.

Therefore, the correct sequence from the options provided is option D: Paleozoic era, Mesozoic era, Cenozoic era.

Which of the following are you not likely to find on a historical map of World War II?

key battles

lines of political divisions

time frame

unsung heroes

Answers

On the map you would find B, lines of political divisions.

I believe the correct answer is D. unsung heroes

Because I've studied about maps in history class and I am positive that it lists the key battles, time frame and lines of political division because it is a very important thing to insert into a historical map to give information about world war 2, that way we know what, where, when and why.

What caused immigration from latin america to the united states to increase?

Answers

cost of living and the fact that the rate of money exchange is so high

What does the president do as head of a political party?

Answers

As head of a political party the president uses his power and prestige to support party goals or candidates.

What did the confederate states of america (csa) do when some southerners were hesitant to leave the union?

Answers

The confederacy named moderate Jefferson Davis its president.

The Confederacy named moderate Jefferson Davis its president.

Read the sentence. Most swimmers learn the crawl first because it was easiest. Which revision corrects the error in verb sequence? A. Most swimmers learn the crawl first because it was being easiest. B. Most swimmers learn the crawl first because it had been easiest. C. Most swimmers learn the crawl first because it will have been easiest. D. Most swimmers learn the crawl first because it is easiest.

Answers

I'm pretty sure it's D. 

The revision that corrects the error in verb sequence is "Most swimmers learn the crawl first because it is easiest." Option D is correct.

This is the sentence which has the correct verb tense. The first part of the sentence is in present tense so that the second one, in this particular case and context should also be in present tense. All the other options are incorrect because the verb sequence is not proper.

how did congress react to the growing conflict over slavery

Answers

Under Southern pressure, in 1836 , the House of Representatives passed "gag rule" allowing that all abolitionist petitions be retired without any debate about them. It was passed by the House of Representatives in between 1836 and 1840 and revoked in 1844.

Christianity is a religion.
a.polytheistic
b.pantheistic
c.monotheistic

Answers

C because it only worships one god which is basically the definition of monotheistic.
the answer is monotheistic, mono means one, there is only one god. hope that helps (:

The Battle of Saratoga was a turning point in the American Revolution because it invalidated the use of dragoons by the British Army?
true or false

Answers

That would be false, I got it correct on the test I took so I know it's correct. 

Answer:

The statement is false. The Battle of Saratoga was a turning point in the American Revolution because it attracted France and Spain to join the Americans in the war against Great Britain.

Explanation:

The Battle of Saratoga was the confrontation that decided the fate of British Army General John Burgoyne during the American Revolutionary War and is also recognized as the time when that the conflict began to turn in favor of the United States. The battle was split in two events fought eight days apart on the same terrain, 14 km from Saratoga, New York. Burgoyne's campaign aimed at dividing the New England region began well but eventually changed due to logistical problems following a tactical victory over the Continental Army under General Horatio Gates on September 19 at the Battle of Freeman Farm, but at a very high cost. His achievements were erased when he again attacked the Americans on October 7 at the Battle of Bemis Heights and the Americans eventually captured much of the English army. Burgoyne was then forced to withdraw and his forces eventually surrendered to a numerically superior American army at Saratoga, which also led him to formally surrender on October 17. The news of Burgoyne's surrender ultimately convinced the French government to join the war with the Americans. French participation turned the war into a "global" conflict. This battle also drew Spain to the American cause.

What dictator was over serbia when montenegrins really began to consider becoming independent?

Answers

Yugoslavia persisted in order to arose as the Federal Republic of Serbia and Montenegro. Within a span of three years, Montenegro will be able to choose whether or not to pursue liberation. Through this the Modern Serbia’s fellow republic which is the Montenegro, was assimilated into the initial Serbian Kingdom throughout the Middle Ages. With this they effectively persist independence while the Serbia is being reigned by the Ottoman Turks.

Slobodan Milosevic was the dictator of Serbia when Montenegrins considered independence, as he sought to create a Greater Serbia, leading to the breakup of Yugoslavia.

The dictator who was overseeing Serbia during the period when Montenegrins began to seriously consider independence was Slobodan Milosevic. In the early 1990s, Milosevic pursued a nationalistic goal of creating a Greater Serbia which would unite ethnic Serbs from different regions of Yugoslavia. His efforts led to significant opposition and the eventual breakup of Yugoslavia. Monaco, Slovenia, Croatia, and Macedonia declared independence in 1991 due to fears of war, and the UN rejected Yugoslavia for membership in 1992. Kosovo and Montenegro were part of Serbia at the time. In response to political unrest, Milosevic abolished the autonomy of Kosovo in 1989 and installed puppet governments in both Montenegro and Kosovo to further his aims, resulting in increased tensions and a push for independence.

Why did President Lincoln call for martial law and suspend citizen's rights in the borders states during the Civil War?

Answers

Abraham Lincoln, was desperate to prevent Maryland from joining the Confederacy (by force, if necessary), as such a turn of events would surround the Union capital of Washington, DC with hostile territory. The day after "Maryland, My Maryland" was first published, Lincoln suspended the writ of habeas corpus in Maryland. Subsequently, as Virginia's secession from the Union became imminent, Lincoln sent the Union Army to occupy Annapolis and Baltimore, and declared martial law.

Where was emperor yong le's imperial city built? why was it known as the forbidden city?

Answers

The history of the Forbidden City begins in the 15th century when it was built as the palace of the Ming emperors of China. It is located in the centre of Beijing, China, and was the Chinese imperial palace from the mid-Ming Dynasty to the end of the Qing Dynasty in 1912. It has been a museum since the 1920s.

The application of the theory of evolution and natural selection to human society was known as what

Answers

selective process, by Charles Darwin
Final answer:

Social Darwinism refers to the application of the theory of evolution and natural selection to human society, suggesting social and economic disparities are due to natural selection.

Explanation:

The application of the theory of evolution and natural selection to human society is known as Social Darwinism. This theory was promoted by Herbert Spencer in the 19th century, who combined Charles Darwin's concept of natural selection with Jean-Baptiste Lamarck's views that acquired characteristics can be passed down. The principle implies that social and economic differences between people and nations are due to the survival of the fittest in nature. In other words, Spencer argued that traits like diligence and ambition are inherited and lead to success, while traits such as laziness and weaknesses are also inherited and can lead to poverty or social inequality. It's worth noting that despite its historical influence, Social Darwinism is now widely considered a discredited and controversial ideology.

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Why did the british empire insist on their right to trade opium with china?

Answers

The British Empire fought for the right to trade opium with China to open the trade market and to gain the possession of Honk Kong Island. This open many ports to international traders thus enhancing the British political and monetary dominance in the region.

Answer:

The British argued that opium was only a fraction of the volume of trade delivered to China.

Explanation:

Opium was the only trade good that the British could sell in China at a profit. The British had, for centuries, been purchasing Chinese tea with silver, but the Chinese could not be enticed by any manufactured British goods. Opium, however, was another story. It was much stronger and potent than the opium China was able to produce.

Who controlled land from florida northern border to mississippi river during revolutionary war?

Answers

George Rogers Clark a great soldier who fought during the revolutionary war won a lot of battles which contributed to the growth of America’s borders. Clark applied his knowledge on surveying to achieve victory. He has the highest status as an officer during the revolutionary war.

Help me please Bainliest Reward

Answers

A and B pretty sure.......... 
The Twenty -sixth Amendment permitted people 18 to 20 years old, regardless of property ownership to vote for the first time.

What are two examples of technology the Spanish used to conquer the Aztecs

Answers

There are none, they used horses and strong armor.

The indigenous persian nationalist movement began to protest against the domination of which two european powers?​

Answers

The indigenous Persion Nationalist movement was protesting against the British empire and Russia. It began in the 19th century. This was partially in response to colonialism and imperialism, though they had a bitter history with Russia. In fact, two Russo- Persian wars were fought. They were over disagreements about what territories belonged to who, and spanned from 1804-1813 and 1826-1828.

Political tensions and debates surrounded territorial expansion of the United States leading up to the Civil War because Question 1 options:
A)Mexico kept control of Texas
B) any new states joining the Union could change the sectional balance (number of slave states vs. number of free states) in Congress.
C) Many people disagreed with Manifest Destiny (westward expansion)
D)States did not want to supply troops to new areas Save

Answers

The answer is B) Any new states joining the Union could change the sectional balance (number of slave states vs. number of free states) in Congress.

A major success for germany and its allies during world war ii was:

Answers

Everything from 1938-1941 so invasion of Poland and France, Belgium, Holland, etc.....

True or False: In Puerto Rico, only about 30 percent of the population is of Hispanic origin. True False

Answers

the answer is FALSE False

The answer is false.

Puerto Rico is Caribbean island located in the northeast Caribbean Sea.

Puerto Ricans became U.S. citizens, aftermath the Spanish-America war in 1917. Thus, they move from the island and the mainland with freedom.

Spanish was the official language in Puerto Rico because they are colonized by Spain but English is made the official language after U.S. acquired the territory.

In conclusion, more than 30% of the people in Puerto Rico are of hispanic origin.

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Under the Black Codes, any white person was legally allowed to _____ any black person in the South.
A. Marry
B. Arrest
C. Murder
D. Teach

Answers

Under the Blacks  Codes,any white person was legally allowed to B.Arrest any black person in the South.

True or false, Cabeza de Vaca had the best relations with the American Indians. Please explain as well please. Thanks 20 points

Answers

The answer is true. Hope this hepso
Yes, The answer is true!

Question text The Declaration of Independence describes certain rights that are known as which of the following?

Answers

The Declaration of Independence describes what is referred to equal and inalienable rights. These rights are life, liberty, and the pursuit of happiness. Thomas Jefferson wrote this United States document in 1789.

Read the excerpt from Ovid’s "Pyramus and Thisbe". And may you, mulberry, whose boughs now shade one wretched body and will soon shade two, forever bear these darkly colored fruits as signs of our sad end What statement best describes the use of poetic elements in the excerpt? A simile compares a tree to death. A tree is given symbolic meaning. Thisbe delivers a rhythmic song. Ovid uses patterned rhyme.

Answers

the answer to this question is B
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