Question

Adam Smith called price mechanism as __________.

• A. invisible hands
• B. consumer sovereignty
• C. consumer liberty
• D. price regulation

Answer 1

The correct option is A invisible hands

Adam Smith called price mechanism as the invisible hands.

1. This is because the price is set at the point at which the demand is made equal to the supply.

2. So there is an invisible force that is acting and making this happen.

3. This unseen force which determines this point is said invisible hands.

4. The market is left freely to act as per its own wish without the interference by the government.