Adam Smith's "Invisible Hand" Explains

question 118

Multiple Choice

Adam Smith's "invisible hand" explains

• A)why people act in their own best interests
• B)why the government intervenes to overcome failures in private markets.
• C)how people,acting out of self-interest,unintentionally promote the general good
• D)how comparative advantage and specialization promote international trade
• E)how the creation of goods and services (supply)generates its own demand by creating employment and income

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Definitions:

Damage Award

A financial compensation granted by a court to indemnify losses or damages suffered by a plaintiff.

Drudgery

Tedious, hard, and repetitive work that is often seen as unenjoyable.

Competitive Factor Markets

Markets where factors of production (like labor, capital) are bought and sold, with many sellers and buyers leading to competitive prices.

Prices

The monetary value assigned to goods and services, determining how much consumers need to pay to obtain them.