U1.L4-5 Quiz: Rise of Liberal Economics

The ability of individuals to act freely as consumers and producers within an economic system is called:

• economic freedom

• individualism

• Capitalism

• economic equality

A student wrote the following list in their notebook:

- few government rules and regulations

- maximum rights and freedoms

- emphasis on promoting the interest of individuals

What are their notes about?

• classical liberalism

• Capitalism

• modern liberalism

• democracy

"As a business owner, I have taken big risks to gain financially. I am responsible for myself, whether I win or lose. If I work hard, I will win. If I make smart decisions, I will win big. The government has no place in my business or my decisions."

This speaker would agree with which of the following?

• modern liberalism

• mercantilism

• collectivism

• laissez-faire economics

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

The government is about to raise taxes on corporations. What would Adam Smith think?

• This is not a good idea. The government should never raise taxes. Individuals are responsible for their own economic situations.

• This is a good idea. The government needs to redistribute wealth from the corporations. Why should individuals be responsible for contributing to society more than corporations?

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

Phil invests his life savings into his personal business. What would Adam Smith think?

• This is a bad idea. Individuals need to be cautious with their money and pay into social programs for their well-being.

• This is a good idea. It is up to individuals to create their own prosperity and opportunities.

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

The government establishes an anti-theft task force. What would Adam Smith think?

• This idea is okay. The government should create more regulations on business to prevent theft.

• This idea is okay. The government can protect people, but it shouldn't take control over the economy in any way.

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

The government establishes an anti-theft task force. What would Adam Smith think?

• This idea is okay. The government can protect people, but it shouldn't take control over the economy in any way.

• This idea is okay. The government should create more regulations on business to prevent theft.

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

Investors are able to sell their shares at a higher price than they paid for them. What would Adam Smith think?

• This is a terrible idea. Companies and individuals shouldn't be able to raise prices when they feel like it. It takes advantage of others.

• This is a great idea. That is the way the economy should run. It is through investments that companies and individuals will prosper.

Imagine that you are Adam Smith. Rate the situation provided according to what he would have to say on the issue.

The Prime Minister provides financial assistance to a company that is at serious risk of failing. What would Adam Smith think?

• This is not a good idea. If a company is not able to succeed, then that company should be left to fail. It is not the government's responsibility to help anyone.

• This is a good idea. If a company is not able to succeed, this will prevent job loss. It is not the fault of the individual workers for a company failing due to mismanagement.

All economic systems try to achieve:

• economic stability

• equality of access to resources

• long-term prosperity

• unrestricted personal freedom