Which of the following best describes the "invisible hand?"
A) Price signals drive the market mechanism.
B) Government regulations influence the allocation of society's scarce resources.
C) The Internal Revenue Service enforces the nation's tax laws.
D) Lobbyists influence which laws are passed by Congress.

Question

Quizplus · Accepted Answer

The invisible hand is a concept developed by Adam Smith in which market prices and competition lead to the allocation of resources in a way that is beneficial for society as a whole, even though each individual is pursuing their own self-interest. Price signals, in this sense, function as the invisible hand directing resources to where they are most needed.

Which of the Following Best Describes the "Invisible Hand