Invisible Hand
Definition
The term "invisible hand" was coined by Adam Smith, a prominent economist and philosopher, to describe the self-regulating nature of marketplaces. It refers to the idea that individuals, motivated by their own self-interest, unintentionally promote the common good in a free-market economy.
Related terms
Laissez-faire: This term describes an economic policy that advocates minimal government intervention in economic affairs and emphasizes free markets.
Supply and demand: It refers to the relationship between the quantity of a product or service available in the market (supply) and how much people want or need it (demand).
Market equilibrium: This term represents a state where supply and demand are balanced, resulting in stable prices and quantities exchanged in a market.
"Invisible Hand" appears in:
Subjects (2)
Practice Questions (4)
Which Enlightenment thinker is associated with the idea of the "invisible hand" in economics?
Which of the following Enlightenment thinkers argued for the idea of the "invisible hand" and the self-regulating nature of the economy?
Which of the following thinkers is associated with the idea of the "invisible hand" in economics?
Who coined term “invisible hand” referring to the self-regulating nature of marketplaces?
Are you a college student?
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.