What is the invisible hand? What will be an ideal response?

QUESTION

What is the invisible hand?

What will be an ideal response?

ANSWER

Adam Smith used the term to describe the natural force that guides a competitive marketplace. He believed that an individual, acting out of self interest when exchanging goods and services, actually benefits society. Buyers and sellers decide how much product they produce and how much product they buy; thereby creating an optimal supply, demand, and price structure for the entire marketplace.