Adam Smith used the metaphor of the "invisible hand" to explain how
A) markets mismatch buyers and sellers.
B) business owners are benevolent.
C) people acting on their own self-interest promote the interest of society as a whole.
D) the production possibilities frontier illustrates efficient outcomes.

Question

Quizplus · Accepted Answer

Adam Smith used the metaphor of the "invisible hand" to explain that when individuals pursue their own self-interest in a market economy, they inadvertently promote the interest of society as a whole through the market mechanism. The market prices and incentives guide individuals to produce and consume goods and services that are valued by others, thereby leading to efficient allocation of resources and overall economic growth.

Adam Smith Used the Metaphor of the "Invisible Hand" to Explain