Question

The invisible hand refers to the Multiple Choice fact that the U.S. tax system redistributes income from rich to poor. fact that government controls the functioning of the market system. tendency of monopolistic sellers to raise prices above competitive levels. notion that, under competition, decisions motivated by self-interest promote the social interest.

Answer 1

According to the theory of the invisible hand, when there is competition, self-interested decisions advance the society interests.

What is the invisible hand theory?

Adam Smith, a Scottish philosopher and economist, popularized the metaphor of the "invisible hand" to describe the processes by which positive social and economic consequences may result from the collective self-interested acts of individuals, none of whom intend to produce such outcomes.

How is Adam Smith's invisible hand idea still applicable today?

An important economic idea that is still relevant today is the invisible hand theory. It may provide insight into the operation of free markets and consumer behavior. Although the idea is significant, it is frequently applied in ways that are inconsistent with Smith's original text or out of context.

What exactly is the "invisible hand" and why is it significant?

The term "invisible hand" describes how an individual's self-interests help society as a whole. In other words, through pursuing the profit motive, individuals are required to offer commodities at a cost that others are prepared to pay. Society gains as a result since those goods might not have been created otherwise.

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