In the context of economic theory, the 'Invisible Hand' suggests that:
A. Individuals pursuing self-interest can promote social welfare through market mechanism
B. Markets always fail
C. Collective ownership is optimal
D. Government planning is necessary for efficiency
Answer: Option A
Solution (By JKSSB Mock Tests)
Adam Smith's concept of the invisible hand argues that individuals seeking their own gain in competitive markets unintentionally promote the overall social good.
Explanation:
In a command (planned) economy, a central planning authority makes major decisions regarding production, allocation of resources and distribution of goods.
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