Lesson 12: Adam Smith and the Wealth of Nations

What is Adam Smith best known for?

• Developing the theory of mechanicalism

• Leading the American Revolutionary War

• Inventing the concept of capitalism

• Writing a book on the nature and causes of the wealth of nations

What did Adam Smith's book, The Wealth of Nations, mark the beginnings of?

• The American Revolutionary War

• The French Revolution

• Economics as a separate academic discipline

• Modern industry

What is the nickname given to Adam Smith?

• Father of Industrial Revolution

• Grandpappy of Capitalism

• Grandfather of Economics

• Father of Democracy

What theory did Adam Smith hated and criticized in his book?

• Capitalism

• Feudalism

• Mercantilism

• Socialism

What did Adam Smith argue was the key to a wealthy nation?

• Having slow inefficient technology

• Having a large population to work in farming villages

• Having people use their capital to generate more wealth

• Having a strong military to take over small rich countries

How was industry similar to farming?

• You could grow your wealth by building more useful things

• It relied on agricultural produce

• You could own land and immediately gain rich

• Industry required wood to burn and generate steam

What did Adam Smith define as capital in economics?

• The total population of a country
• The government's budget deficit
• Anything that allowed you to add value to something you are making

• The labor force in an economy

According to Adam Smith, what is the logical progression of a nation's wealth?

• Farming, industry, service-based economy

• Service-based economy, industry, farming

• Service-based economy, farming, industry

• Industry, farming, service-based economy

What did Adam Smith say that people of the past did when a country ran out of farmland?

• Build banks to store grain

• Develop industry

• Focus on service-based economy

• Invade neighboring countries and take their land

What did Adam Smith highlight as a key driver of increasing wealth in any market?

• Government intervention

• Specialization and trade

• Self-sufficiency

• Monopolies