MICROECONOMICS Which of the following was Adam Smith not referring to when he us
ID: 1133988 • Letter: M
Question
MICROECONOMICS
Which of the following was Adam Smith not referring to when he used the analogy of the “invisible hand/”
The ability of the price mechanism to motivate us to make a productive contribution to society.
The ability of the price mechanism to tell each of us how we can use our unique combination of skills, talents and strengths to create the greatest wealth for ourselves.
The ability of the government to force us to perform the tasks that it deems right for us.
The ability of the price mechanism to guide resources into the industry in which they are most highly valued.
A.The ability of the price mechanism to motivate us to make a productive contribution to society.
B.The ability of the price mechanism to tell each of us how we can use our unique combination of skills, talents and strengths to create the greatest wealth for ourselves.
C.The ability of the government to force us to perform the tasks that it deems right for us.
D.The ability of the price mechanism to guide resources into the industry in which they are most highly valued.
Explanation / Answer
Answer - Adam Smith was not referring ''the ability of the government to force us to perform the task that it deems right for us. Adam Smith was a classical economist who advocated the policy of 'Laissez-faire'. The 'Laissez-faire' policy refers to minimum governmental interference in economic activities. Thus statement (c) was not being referred by the analogy of 'invisible hands'.
Option C is the correct answer
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