Business and Government — Test

Question 45 • CMS 2026-2027 Economics and Personal Finance INITIAL CREDIT

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

Answer

Smith said government was the key to solving economic issues, while Keynes believed government should take a hands-off approach.

Keynes believed in an "invisible hand" with which consumers push the economy, while Smith did not agree with this idea.

Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.

Smith believed in an "invisible hand" with which government pushes the economy, while Keynes did not agree with this idea.

Explanation

Keynes argued that government should intervene in the economy, especially by increasing spending during downturns to support demand and employment. Smith is associated with the “invisible hand,” the idea that individuals pursuing their own interests can help guide markets, generally with limited government interference. Therefore, C best summarizes their difference.

AI-written and checked against the verified answer.

More from this Course

Test

Test

Test