The Invisible Hand Principle Suggests That

question 377

Multiple Choice

The Invisible Hand Principle suggests that

• A) market prices direct individuals to produce more goods.
• B) individuals pursuing their own interests detract from the economic well-being of society.
• C) there should be stronger governmental initiatives to ensure cooperation for the betterment of society.
• D) market forces tend to channel the actions of self-interested individuals into activities that promote the general betterment of society.

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Definitions:

External Validity

The extent to which the results of a study can be generalized or applied to other situations or to other people.

Internal Validity

The extent to which an experimental design accurately demonstrates a causal relationship between variables, without influence from external factors.

Causal Relationship

A causal relationship indicates a connection between two variables where changes in the value of one variable are known to cause changes in the value of another variable.

Demand Characteristics

Environmental cues in experiments that might influence participants' behavior or responses, potentially biasing the results.