Question

The capitalist economy comprises two forms of economic organization, the market mechanism operated by prices and the administrative mechanism of firms. a. The market mechanism is referred to as the "visible hand" while the administrative mechanism of firms is referred to as the "invisible hand". b. The market mechanism is referred to as the "invisible hand" while the administrative mechanism of firms is referred to as the "visible hand". c. The simultaneous operation of both "hands" means that the capitalist system is often referred to as an "ambidextrous organization". d. The notion of the capitalist economy as governed by market processes is a myth. In reality the global capitalist economy is controlled by large corporations.

Answer 1

Answer:

Option B: The market mechanism is referred to as the "invisible hand" while the administrative mechanism of firms is referred to as the "visible hand"

Explanation:

The invisible hand of the market mechanism is simply the known first form of the market as it is the point in which individuals and firms make independent decisions and well guided by market prices. Deliberate and conscious global planning is not needed in invisible hand market mechanism.

The visible hand market mechanism is also called administrative mechanism as it involves active planning in coordinating players.

Economic decisions are usually in the hierarchy that is the firm by managers and imposed through a hierarchy.