Question

Which 19th-century situation best represents Adam Smith’s ideas on how the invisible hand of markets works?

Answer 1

The phrase invisible hand was introduced by Adam Smith in his book 'The Wealth of Nations'. He assumed that an economy can work well in a free market scenario where everyone will work for his/her own interest.

He explained that an economy will comparatively work and function well if the government will leave people alone to buy and sell freely among themselves. He suggested that if people were allowed to trade freely, self interested traders present in the market would compete with each other, leading markets towards the positive output with the help of an invisible hand.

Answer 2

B. Countries that adopted capitalism often created more jobs for middle-class citizens.

Step-by-step explanation:

This is the statement that best represents Adam Smith's ideas on how the invisible hand of markets works. Adam Smith's "invisible hand" is a metaphor that describes the way in which a capitalist economy operates. Smith believed that, if left alone, a capitalist economy would grow without any influence or manipulation, simply as a response to the opposing but complementary forces of supply and demand.