The concept of "invisible hand" introduced by Adam Smith 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 generates its own demand by creating employment and income.

Question

Quizplus · Accepted Answer

The concept of "invisible hand" introduced by Adam Smith explains how people, acting out of self-interest, unintentionally promote the general good. It means that the market economy works automatically to allocate resources efficiently, and the actions of individuals result in a positive outcome for the society as a whole. It is based on the assumption that in a free market economy, producers and consumers maximize their own interests, and competition ensures that resources are utilized efficiently. Thus, the invisible hand ensures that the market operates in the interest of society as a whole, without the need for centralized control.

The Concept of "Invisible Hand" Introduced by Adam Smith Explains