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QuizMultiple Choice

Economic Policy: Influential Theories

Question 1 • * HSA 26-27 Economics

Which economist most likely would have agreed with the US government’s intervention during an economic crisis in 2008?

Answer
A
Friedrich von Hayek
B
Adam Smith
C
John Maynard Keynes
D
Milton Friedman

Explanation

John Maynard Keynes argued that governments should intervene during economic downturns, using measures such as increased public spending to support demand and employment. The US government’s actions during the 2008 crisis fit this interventionist approach. Hayek and Friedman generally favored less government intervention, while Adam Smith is associated with the idea of markets coordinating economic activity.

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