A. American traders increased trade with Spain, leading to an economic boom.
B. The French joined the Americans in a war against Britain.
C. The British stopped the practice of taking American sailors.
D. American merchants were bankrupted, sailors were put out of work, and farmers were unable to sell their crops.
The correct answers are: Adam Smith and invisble hand.
Adam Smith wrote one of the most famous books on economics and is still cited today as a means to understand the structure of the American economy. In his book, Wealth of Nations, Smith discusses how government intereference should be almost non existent in the economy. Rather, competition between businesses will result in the best possible outcome for consumers. Smith makes this claim based on the idea that businesses will act in their own best interest. By default, this best interest will result in the best deals for the consumer, as the business owner needs the consumers in order to suceed.
Option A is the right answer that Free-market economies use prices to distribute goods, services, and resources.
In economics, a Free-market is an idealized system, where the prices for goods and services are determined by the open market forces( demand and supply). Therefore the government plays no role in price fixing in the open market competition. The most important and the basic feature of this type of economy is that only the people have the right to purchase goods and services with its adequate control over resources.