Question

Audrey is debating the superiority of a market economy with her friend Bill. Audrey supports her argument in favor of a market economic system with Adam Smith's concept of the invisible hand. How might Bill effectively respond to Audrey in defense of a mixed economic system? Use the following questions to form a complete argument. a) Explain Adam Smith's concept of the invisible hand as it relates to market economies.

Answer 1

Adam Smith's invisible hand theory is the concept that in a market where people are free to buy and sell as they please, buyers will buy goods that sellers offer at prices that work for all parties.