A Necessary Assumption Behind the Invisible Hand Theorem Is That

question 50

Multiple Choice

A necessary assumption behind the invisible hand theorem is that:

• A) market forces are determined by cultural norms.
• B) market forces produce inefficient outcomes.
• C) the price mechanism is not constrained by political or social forces.
• D) people behave rationally.

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Definitions:

Ideal World

A conceptual scenario depicting a perfect state of existence, devoid of problems or injustices typically found in the real world.

Agency

An organization or unit within a government responsible for implementing policies and providing specific services.

Electoral Politics

The activities associated with the election of officials to government positions, including campaigns and voting.

Social Reform

Efforts aimed at making significant modifications to societal structures in order to address injustices and improve the collective well-being.