Adam Smith's invisible hand implied that efficiency could be attained if
A)A Government committee coordinate production based on people's comparative advantage
B)Government coordinated the price and quantities of goods and services produced
C)Government would leave the price and output decisions to the market capitalist system
D)Government provided subsidies and other incentives for production

Question

Quizplus · Accepted Answer

Adam Smith's invisible hand theory implies that efficient allocation of resources and production can be achieved if the market capitalist system is left to determine output and prices without government interference. This means that firms and individuals would naturally pursue their own self-interest in producing and consuming goods and services, leading to a naturally efficient and self-regulating economy. Choices A, B, and D all involve government intervention and steering away from the principles of the invisible hand theory.

Adam Smith's Invisible Hand Implied That Efficiency Could Be Attained