The "invisible hand" is
A)used to describe the welfare system in the United States.
B)a concept developed by Adam Smith to describe the virtues of free markets.
C)a concept used by J.M.Keynes to describe the role of government in guiding the allocation of resources in the economy.
D)a term used by some economists to characterize the role of government in an economy - inevitable but invisible.

Question

Quizplus · Accepted Answer

The "invisible hand" is a concept developed by Adam Smith to describe the virtues of free markets. It refers to how the self-interested actions of individuals in a market economy can lead to unintended, positive consequences for society as a whole. This happens through the market mechanism of supply and demand, as producers compete to make goods and services that consumers want, and prices adjust to balance the two. Smith argued that this process would result in the most efficient allocation of resources and the greatest overall prosperity for society.

The "Invisible Hand" Is