Question

Which best describes the idea behind the "invisible hand"? Producers decide what to make for consumers, which guides the economy. Individuals seeking their own self interest benefit the economy as a whole. Government sets policy for producers and consumers, which guides the economy. Consumers decide what they need and want to buy, which guides the economy.

Answer 1

With the options given in the question, the correct answer is C) the government sets policy for producer and consumers, which guides the economy.

The option that best describes the idea of the “invisible hand” is “the government sets policy for producer and consumers, which guides the economy.”

The “invisible hand” is a term coined by the economist Adrian Smith in his book “The Wealth of Nations”. It implies that in the market exist an “invisible hand” that helps the demand and supply of goods to maintain a balance.  

Observing the graphic attached, another valid affirmation that stems from the information in the graphic could be: producers and consumers work together, which guides the economy.

Answer 2

A) Producers decide what to make for consumers, which guides the economy.