The "invisible hand" refers to
A)the ways in which self-interested behaviour of buyers and sellers determines what is produced.
B)the influence of government on market outcomes.
C)the ways in which technology determines how goods and services are produced.
D)money.

Question

Quizplus · Accepted Answer

The "invisible hand" refers to the idea that in a free-market economy, individuals acting in their own self-interest will unintentionally promote the greater good of society as a whole. Adam Smith, the economist who introduced the concept, argued that in a free market, producers acting in their own self-interest would compete to offer the best products at the lowest prices and consumers acting in their own self-interest would choose the best products for the lowest prices. The resulting competition would lead to the most efficient allocation of resources and the greatest overall benefit to society. This is why the invisible hand is often used to describe the ways in which self-interested behaviour of buyers and sellers determines what is produced.

The "Invisible Hand" Refers to