Adam Smith's "invisible hand" explains
A)why people act in their own best interests
B)why the government intervenes to overcome failures in private markets.
C)how people,acting out of self-interest,unintentionally promote the general good
D)how comparative advantage and specialization promote international trade
E)how the creation of goods and services (supply)generates its own demand by creating employment and income

Question

Quizplus · Accepted Answer

Adam Smith's "invisible hand" theory states that individuals acting in their own self-interest can unintentionally promote the greater good and well-being of society. It is not about people solely acting in their own best interests (A) or the government intervening to overcome market failures (B). It also does not specifically relate to comparative advantage and specialization promoting international trade (D) or how the creation of goods and services generates its own demand (E).

Adam Smith's "Invisible Hand" Explains