Even if prices are fixed and competition is restricted by the government, the invisible hand will still work in the economy and lead to economic efficiency. True/false

Question

Business

Janiah Brewer

29 October, 16:14

Even if prices are fixed and competition is restricted by the government, the invisible hand will still work in the economy and lead to economic efficiency. True/false

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Answers (1)

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Xander Orr · Answer 1

FALSE

Explanation:

If rates are not set and the government does not limit trade, the invisible hand will continue to function in the market and will result in economic output.

Government plays an important role in controlling prices and distribution in order to sustain a stable economy in the country. To protect consumer interest, the policy has to fix the price of goods that is generally lower than the equilibrium level.

Therefore this statement is incorrect.