The 'Invisible Hand' Refers to The

question 90

Multiple Choice

The 'invisible hand' refers to the:

• A)marketplace guiding the self-interests of market participants into promoting general economic wellbeing
• B)marketplace as a place where government looks out for the self-interests of individual participants in the market
• C)equity that results from market forces allocating the goods produced in the market
• D)automatic maximisation of consumer surplus in free markets

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Definitions:

Nominal Interest Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate which is adjusted for inflation.

Equilibrium Interest Rate

The equilibrium interest rate is the rate at which the demand for funds equals the supply of funds in the financial markets, balancing savings and borrowing.

Total Output

The complete quantity of goods or services produced by an entity within a specific period.