Question

Andrea thinks that individual citizens, rather than the government, should answer the basic economic questions; however, she feels that government should prevent large changes in the economy. Her ideas are based on which of these economists? A) Keynes B) Smith C) Marx and Smith D) Marx and Keynes

Answer 1

The correct answer is Keynes.

Keynes supported free markets but as long as these were regulated by state intervention in order to soften the peaks and troughs in the business cycle. Therefore, in his opinion, the three economic questions (what to produce, how and for whom) should be answered by the economic agents in the markets, but always under the supervision of the state.

Smith was an advocate of free markets and of supressing state interventionism. On the other hand, Marx was in favour of massive intervention of the state because he considered markets to produce un unfair distribution of wealth in the states, where the richer ones exploited the poor.