Adam Smith characterized the operation of the market system in the following terms: (Please select all that apply.)
A) Private businesses are motivated by the goal of serving the common good
B) Though motivated by self-interest private businesses are inadvertently led to serve the common good
C) To make a profit businesses are led to serve the needs of customers
D) The common good is never realized through the pursuit of self-interest in the market

Question

Quizplus · Accepted Answer

Adam Smith argued that although individuals and businesses are motivated by self-interest, this self-interest inadvertently leads them to serve the common good by providing goods and services that others need, in pursuit of profit. This concept is often summarized by the metaphor of the "invisible hand," suggesting that self-interested actions can lead to positive societal outcomes.

Adam Smith Characterized the Operation of the Market System in the Following