Adam Smith suggested that an invisible had guides market economies.In this analogy,what is the baton that the invisible hand uses to conduct the economic orchestra?
A)the government
B)prices
C)subsidies
D)the Federal Reserve

Question

Quizplus · Accepted Answer

According to Adam Smith, prices act as signals that coordinate production and consumption decisions in a market economy. The invisible hand guides individuals to pursue their own self-interest in a competitive marketplace, and prices adjust to match consumers' preferences with the available supply of goods and services. Therefore, the baton that the invisible hand uses to conduct the economic orchestra is the price system.

Adam Smith Suggested That an Invisible Had Guides Market Economies