Monday, February 27, 2012
invisible hand
Invisible Hand is an interesting article that mainly highlights Adam Smith's theory that is still so widely used in economics today. A main idea is how when the demand of something is high, then then price will go up. it is possible for a market to fail for certain reasons, but this idea is very efficient for decision making in the economic world. The Invisible Hand explains how consumption of different resources will be very important to the economy's welfare. The article mentions how there is an invisible hand that helps the market get to a healthy level for the society, but I don't exactly understand the analogy being made with an "invisible hand". What is invisible and why is it invisible? What is the hand and why not something else like a car or person?
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