2/2/2023 0 Comments Invisible hand example quizletThe theory is often used as a backbone to support the idea of a free market, though some have said in the past that the idea is taken out of context.Īccording to Michael Edesess, Ph.D. As part of the concept, Smith said that people act in their own best interest, which ultimately benefits the economy as a whole. The metaphor of the invisible hand is used to describe the underlying forces that we don't see that have an impact on people's economic choices. Understanding the invisible hand and how it works It is a foundational concept for rational choice theory, which states that people will make decisions based on their own personal self-interest and benefits. The invisible hand concept was an idea proposed by economist Adam Smith that illustrates the hidden forces behind people's economic choices.
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