Adam Smith Used the Term 'Invisible Hand' in His 1776

question 136

Essay

Adam Smith used the term 'invisible hand' in his 1776 book The Wealth of Nations.Prices are the instrument with which the 'invisible hand' directs economic activity in a market economy.Explain.

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Definitions:

Exchange Loss

occurs when a decrease in the value of a foreign currency relative to the reporting currency leads to a loss when foreign currency transactions are settled or translated.

Payable

refers to an amount of money that a company owes to suppliers or creditors and is recorded as a liability on the company's balance sheet until it is paid.

Foreign Currency Monetary Unit

A unit of currency from a country other than the domestic currency of the entity reporting that is used in international transactions or other monetary statements.

Exchange Loss

A financial loss realized when converting currencies due to a decrease in the value of the exchanged currency.