Adam Smith’s Definition of Economics

| April 6, 2014 | 0 Comments

As we were going to define Adam Smith’s definition, so firstly dear students its really important thing that we shall know who is Adam Smith, Now here were going to give some light on the introduction of Adam Smith.Like Minded Economists Adam Smith Definition Wallpaper

Adam Smith is the founder of Economics, he is a very famous and authentic British Philosopher and Economist, he was born in 1723 and Adam Smith was died in 1790. In the year of 1776 he wrote his very famous book named”
The Wealth of Nation” In his Book he called Economics as the Science of Wealth and after that many other economists agreed with Adam’s decision and they also considered Economics as the Science of Wealth. Adam Smith's Definition Of Economics WallpaperSo according to the definition of Adam, there are four important points of the definition, and that are disused below.

  1. Production of wealth
  2. Exchange of wealth
  3. Distribution of wealth
  4. Consumption of wealth

The explanation of all these four important points are listed below.

(1) Production of wealth

As their we were going to explain production of wealth, it is necessary to have the idea about production that, what is production? which expects involved in production process?  and what are these aspects or factors?actually there are four major factors of production.

  1. Land
  2. Labour
  3. Capital
  4. Entrepreneur

When ever any production is come in to existence all these four factors were involved in it, rent is the part of reward or payment in result of out put of land, and the labour will do their job and in result they get wages, capital is the source of income of any person which he invests in any law full activity and he must focus to earn some thing from his capital, so the goods and services is the out put of capital, and the entrepreneur always do some thing for the sake of producing goods and services.

(2) Exchange of wealth

Different needs of a person can fulfill by exchanging their things with others, as we know about barter system same sense will be taken here and only wealth can help for exchanging many wants or needs.

(3) Distribution of wealth

Distribution of wealth is very important for every person as like it is very important for a country or state,  if the distribution of wealth is not on equal manner its create many problems like then no one can take his share, its the share of wealth in national wealth in a period of a year.

(4) Consumption of wealth

Every person want to get benefits from their resources so he utilized his services and things for his happiness in national wealth that is called consumption of wealth.

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