What can hinder the invisible hand's ability to coordinate the decisions of the firms and households in the economy?
A) government actions that distort prices
B) increased competition in the market
C) extended periods of unemployment
D) a dramatic reduction in consumer spending

Question

Quizplus · Accepted Answer

Government actions, such as price controls or subsidies, can distort the market signals that the invisible hand relies on to coordinate decisions. This can result in misallocation of resources and decreased efficiency in the economy. The other choices do not directly affect the invisible hand's ability to coordinate decisions.

What Can Hinder the Invisible Hand's Ability to Coordinate the Decisions