Question

Who is the British economist who criticized laissez-faire (classical) economics and advocated economic management through fiscal policy?

1) Adam Smith
2) John Maynard Keynes
3) Milton Friedman
4) Karl Marx

Answer 1

John Maynard Keynes is the British economist who challenged classical economics and argued for economic intervention through fiscal policy, an approach that has since become known as Keynesian economics.

Step-by-step explanation:

The British economist who criticized laissez-faire economics and advocated economic management through fiscal policy was John Maynard Keynes. Keynes introduced a new economic theory that suggested active government intervention is necessary during economic downturns. His ideas, known as Keynesian Economics, proposed that the government can mitigate the effects of economic depressions by increasing spending and decreasing taxes to stimulate demand and pull the economy out of recession. This approach was contrary to classical economists, like Adam Smith, who believed in minimal government intervention.

Keynes's influence is particularly noted during the 1930s Great Depression, where his theories inspired the New Deal policies in the United States. These policies aimed to deal with widespread unemployment and deflation by increasing government expenditure and providing public works jobs, attempting to kickstart economic growth.

Answer 2

John Maynard Keynes was the British economist who criticized laissez-faire economics and advocated for the use of fiscal policy to manage the economy, especially during downturns.

Step-by-step explanation:

The British economist who criticized laissez-faire economics and advocated economic management through fiscal policy was John Maynard Keynes. He believed that during economic downturns, the government should play an interventionist role, increasing spending and offering tax breaks to mitigate the effects of recessions and depressions. Conversely, in prosperous times, Keynes suggested the government should cut spending and increase taxes to control inflation. His contribution to economics also included the idea that economics is a method of thinking, helping individuals to draw correct conclusions.

Keynes argued that the government should play a more active role in the economy during recessions and depressions by implementing fiscal and monetary measures, such as increased spending and tax breaks, to stimulate economic growth and employment. His ideas were revolutionary at the time and have greatly influenced modern views of macroeconomics and economic policies.