Management Society class

WEALTH OF NATIONS

STUDY QUESTIONS BOOK IV CH2

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?