Distinguish which of the following best describes Adam Smith's "invisible hand"?

A. Self-interest

B. Tariffs

C. Avoidance of the law and violation of other people's property rights

D. Government regulations

A. Self-interest

The term 'self-interest' best describes Adam Smith's 'invisible hand'.

Answer: Option A

Explanation:

The self-interest of the entrepreneur who bears the risk of loss in the business and the self-interest of the components of the market who govern the demand and supply are what Adam Smith referred to as the 'invisible hand'.

This invisible hand drives the market and keeps it functional on an everyday basis. If there would have been no 'self-interest' involved in the functioning of the market, the existence of the market would have not been as vibrant as it ever is.