contestada

According to________ , self-interest and competition act as_______ , guiding firms in a market-based economy.

Respuesta :

According to Adam Smith, self-interest and competition act as an invisible hand, guiding guiding firms in a market-based economy.

The correct answers are: Adam Smith and invisble hand.

Adam Smith wrote one of the most famous books on economics and is still cited today as a means to understand the structure of the American economy. In his book, Wealth of Nations, Smith discusses how government intereference should be almost non existent in the economy. Rather, competition between businesses will result in the best possible outcome for consumers. Smith makes this claim based on the idea that businesses will act in their own best interest. By default, this best interest will result in the best deals for the consumer, as the business owner needs the consumers in order to suceed.