The "invisible hand" refers to
A)the marketplace guiding the self-interests of market participants into promoting general economic well-being.
B)the fact that social planners sometimes have to intervene, even in perfectly competitive markets, to make those markets more efficient.
C)the equity that results from market forces allocating the goods produced in the market.
D)the automatic maximization of consumer surplus in free markets.

Question

Quizplus · Accepted Answer

The term "invisible hand" was coined by Adam Smith, and refers to the idea that in a free market economy, individuals pursuing their own self-interest will unintentionally promote the well-being of society as a whole. The invisible hand represents the guiding force of the market that leads to economic efficiency and prosperity. Therefore, choice A is the correct answer. Choices B, C, and D are incorrect because they do not accurately describe the concept of the invisible hand.

The "Invisible Hand" Refers to