1. How does Adam Smith’s Capitalism work as an economic system?

2. Profit is the Motivator
Self interest drives human behavior

3. Competition is the Regulator
There is an incentive to make things cheaper, faster, better

4. The “Unseen Hand” goes round and round
when there is demand for something, it will be produced

5. 1. Adam Smith recognized that the “invisible hand” works by:
A. Government rules forcing businesses to act responsibly
B. People living by the golden rule
C. Individuals acting in their own self-interest
D. Charitable contributions to worthy causes

6. 2. Adam Smith recognized that in market economies self-interested behavior is controlled by:
A. Competition
B. Government regulations
C. Labor unions
D. Greed