Asked by Soleil Castaneda on Jun 15, 2024
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The concept of "invisible hand" introduced by Adam Smith explains:
A) why people act in their own best interests.
B) why the government intervenes to overcome failures in private markets.
C) how people,acting out of self-interest,unintentionally promote the general good.
D) how comparative advantage and specialization promote international trade.
E) how the creation of goods and services generates its own demand by creating employment and income.
Invisible Hand
A term coined by Adam Smith to describe the self-regulating nature of the marketplace where individuals pursuing their own self-interest lead to the benefit of society at large.
Comparative Advantage
The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than its competitors.
Self-Interest
The pursuit of personal advantage and well-being, often driving economic decisions and behaviors.
- Grasp the significance of the "invisible hand" theory by Adam Smith and its relationship to market outcomes.
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Learning Objectives
- Grasp the significance of the "invisible hand" theory by Adam Smith and its relationship to market outcomes.
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