In which of the following situations would Adam Smith argue that government intervention in the marketplace is justified?
A) Many food items begin to arrive from abroad, and their cheap price is putting many local farmers out of work.
B) A general economic downturn has occurred, leaving many out of work.
C) A clothing manufacturer invents a new machine that makes it much more competitive than its rivals.
D) Two growing cities have no road to connect them and no private party is seeking to build one.

Question

Quizplus · Accepted Answer

Adam Smith, while a proponent of free markets, acknowledged the necessity of government intervention in cases where the private sector is unable or unwilling to provide essential public goods, such as infrastructure like roads connecting cities.

In Which of the Following Situations Would Adam Smith Argue