Describe two roles of government intervention that Adam Smith conceded were necessary in their approach to the economy. (Site 1)
Answers
Answer:
Adam Smith's three natural laws of economics : the law of self-interest—People work for their own good. the law of competition—Competition forces people to make a better product. lowest possible price to meet demand in a market economy
Explanation:
Smith rejects government interference in market activities, and instead states governments should serve just 3 functions: protect national borders; enforce civil law; and engage in public works (e.g. education).
He stated that the economic is guided by an invisible hand and that governments should interfere less in some areas of the economic to make it more efficient. ... The government should establish an exact administration of justice in the context of order and law .
Let the "free market mechanism" operate on its own without government intervention, Smith advised. Adam Smith advocated a limited role for government. But he recognized significant areas where only it could act effectively. Smith saw the first duty of government was to protect the nation from invasion.
The government (1) provides the legal and social framework within which the economy operates, (2) maintains competition in the marketplace, (3) provides public goods and services, (4) redistributes income, (5) cor- rects for externalities, and (6) takes certain actions to stabilize the economy.
Adam Smith declare to be the three (3) functions of a government? 1) Protect its citizens from foreign aggression. 2) Protect the rights of its citizens from infringement by others.