The "Invisible Hand" Using Adam Smith's Terminology Refers to

question 7

Multiple Choice

The "invisible hand" using Adam Smith's terminology refers to

• A)government control of the market.
• B)market forces working through the price mechanism.
• C)the money supply that serves to keep the economy working smoothly.
• D)the role of innovation in maintaining a steady rate of growth.
• E)"behind-the-scenes" policy making to influence how markets allocate scarce resources.

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Definitions:

Cash Inflows

The movement of money into a business or project, typically from operations, financing, or investing activities.

IRR

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculating the discount rate that makes the net present value of all cash flows equal to zero.

NPV

Net Present Value is a method used to evaluate the attractiveness of an investment or project by calculating the present value of expected future cash flows using a specific discount rate.

NPV Profiles

NPV profiles are graphical representations that show the relationship between a project’s net present value and the discount rate applied to its cash flows.