The Wealth of Nations

Authors: Adam Smith

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Key Ideas

1. Division of labor: Smith argues that the division of labor is the key to economic growth. By dividing tasks and specializing in specific areas, individuals can become more productive.
2. Invisible hand: Smith introduces the concept of the invisible hand, which refers to the natural market forces that guide self-interested individuals to produce goods and services that benefit society as a whole.
3. Self-interest: Smith emphasizes that individuals acting in their own self-interest can unintentionally benefit society by promoting economic growth and productivity.
4. Free markets: Smith advoca....
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Quiz

1. What is the key idea behind Smith's concept of the invisible hand?

The invisible hand refers to government regulation of market forces.

The invisible hand is the force that guides individuals to act in their own self-interest.

The invisible hand refers to the idea of wealth inequality.

The invisible hand promotes international trade.

2. According to Smith, how is wealth created?

Wealth is created through the accumulation of gold and silver.

Wealth is created through the production and exchange of goods and services.

Wealth is created through government intervention in the economy.

Wealth is created through monopolistic practices.

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