Part A

1. Briefly state the "invisible hand" theory in your own words.

2. Two advocates of the "invisible hand" theory who are quoted in the article encourage a "deliberate amorality" in the executive suite. How do they justify this?

3. What does Milton Friedman see as the social responsibility of corporations?

4. According to Bishop, what does Adam Smith say about laws or regulations proposed by those who live by profit?

5. According to Bishop, when corporations combine to restrict wages, does Smith see this as an infringement on the free market? As an example, consider outsourcing jobs to companies in cheaper wage countries

a) no b) yes

6. According to Bishop, how did Adam Smith view international investment as opposed to investing only in one's own country? Did he suggest that was the best way to increase national wealth?

Part B

1. What did Adam Smith say about foreign trade?

2. Did he believe that foreign trade could increase the wealth of a nation?

3. Did Adam Smith assume that profits made from foreign trade would be invested in the trader's own country creating more domestic production and jobs? If so, what was  the basis for this assumption? Cite the page number that addresses this.

4. Are profits that are made today from US corporate foreign trade being invested more in the US or more abroad? Is the wealth in the US increasing?

5. What did Adam Smith say about tariffs and duties imposed on imported goods that are intended to protect domestic industry?

6. Under what two circumstances does Adam Smith believe tariffs and duties are justified?