What does the "invisible hand' concept, as proposed by Adam Smith, primarily signify?
Show answer & explanation
Correct answer: C
Explanation
Answer: Market equilibrium achieved via self-interest
Explanation: The concept of the “invisible hand” was proposed by economist Adam Smith in his work The Wealth of Nations.
Meaning:
Individuals act based on self-interest
Their actions unintentionally benefit society as a whole
This leads to efficient allocation of resources in a free market
Additional Key Facts
Adam Smith is known as the father of modern economics
Invisible hand supports free market economy
It is a foundation of classical economics
Government role is limited to: Law and order, Defense and Basic public infrastructure
Potential Exam Questions and Answers
Q. What does the invisible hand theory suggest?
Ans: Self-interest leads to social benefit
Q. Adam Smith is known as the father of what?
Ans: Modern economics