What assumptions about the economy must be true for the invisible hand to work?

Question

What assumptions about the economy must be true for the invisible hand to work? To what extent are those assumptions valid in the real world? Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., what will happen) about some economic policy, for example, do they have special expertise to judge whether or not the policy should be undertaken? Grading Criteria This is an essay assignment. Please be sure to proof read your work and write in details from your learning. Use "For example" and specific terms from the learning materials. 200-500 word answers and here is the textbook link http://cnx.org/contents/QGHIMgmO@10.233:JgDXaOLP@11/Introduction chapter 1 and 2

Explanation / Answer

We know that the assumption Invisible hand is putforward by the father of Economics Adam smith in his famous work Wealth of nation. In the words of Smith the peoples are self interested. They are interested in the question what will happen?. The assumption the invisible hand is purely the behaviour of human beeing. The self interested people always look like the freedom of their choices to maximise their profits. The important personal freedom is the buying, working and saving. Here we asummed that people earned higher income jobs they want to spend their money themselves.

The self intersted living is always leads to positive statement of their analysis.When people are living in this world they want create an economic output. The consumer are always seek good meterails for their purchasing. People are self interested oneself in their economic living of their life then they are always act as self interested in their remaining life.

In economics the self interest is created by the scarcity of the choice. We know that the resources is limited but choices are unlimited. So people make them as self interested for the available resources.

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