Which of the following is an explanation of what Adam Smith called the "invisible hand" of the marketplace?
A. Advertising causes consumers to desire products that they otherwise would not want.
B. Government regulations influence the decisions of consumers and producers in the market.
C. Self-interest, competition, and incentives promote smoothly running markets.
D. Unforeseen events disturb supplies of goods and services and affect prices in the marketplace.
1 answer
The best answer is:
C. Self-interest, competition, and incentives promote smoothly running markets.
This option encapsulates Adam Smith's concept of the "invisible hand," which suggests that individuals pursuing their own self-interest can lead to positive outcomes for the overall economy through competition and incentives.
