12
QuizMultiple Choice

Economic Policy: Influential Theories

Question 12 • * HSA 26-27 Economics

Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith?

Answer
A
Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.
B
Smith said government was the key to solving economic issues, while Keynes believed government should take a hands-off approach.
C
Smith believed in an "invisible hand" with which government pushes the economy, while Keynes did not agree with this idea.
D
Keynes believed in an "invisible hand" with which consumers push the economy, while Smith did not agree with this idea.

Explanation

Keynes argued that governments should actively manage the economy, especially during downturns, by using measures such as public spending to support demand. Adam Smith generally favored a hands-off approach, believing that individuals pursuing their own interests could help guide the economy through the “invisible hand.” Thus, choice A best summarizes their difference.

AI-written and checked against the verified answer.

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