Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Questions - Page 44: 9

Answer

The invisible hand is a phrase that means that firms and resource suppliers will simultaneously serve their self interest as well as the public or social interest as though by an invisible hand.

Work Step by Step

The concept that self-interest on a large scale serves public interest as well is the core tenet of the invisible hand observation. The invisible hand ensures that when firms maximize their profits and resource suppliers maximize their incomes, these groups also help maximize society’s output and income.
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