1546EconomicsMedium
Which of the following statements is true about a market economy?
AMarket participants act as if guided by an invisible hand to produce outcomes that maximize social welfare
BTaxes help prices communicate costs and benefits to producers and consumers.
CThe strength of a market system is that it tends to distribute resources evenly across consumers.
DWith a large enough computer, central planners could guide production more efficiently than markets.
Correct answer
A. Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare
Explanation
The correct answer is Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare.