Which statement best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith? 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.
The correct answer is A. Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.
Explanation: John Maynard Keynes advocated for active government intervention to manage economic cycles and mitigate recessions, believing that government spending could stimulate demand. In contrast, Adam Smith is known for his support of free markets and the idea of the “invisible hand,” where individual self-interest leads to economic well-being without the need for government intervention.