Drag each label to the correct location on the table.
Match each economist to the scenario that exemplifies his economic philosophy.
Keynes
Hayek
A small Caribbean island's economy depends
on tourism. However, in recent times, it has seen
much less economic activity. Its government decides
to let the market correct the situation.
Flour prices have risen in a country where bread is a
staple part of the diet. As a result, bread prices have
risen tremendously. In an effort to make bread affordable
for its citizens, the government has limited how much
bakers can charge for bread,
Reset
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Chrome OS

The explanation of this question is given below in the explanation section.

Explanation:

In this question, two different scenerios are given regarding two different economic theory. First, we will know that what is Keynes and Hayek economic theory and then do drag the label to correct situation.

Keynes's economic theory

This theory says the government should increase demand to boost growth. Keynesians believe consumer demand is the primary driving force in an economy. As a result, the theory supports expansionary fiscal policy. Its main tools are government spending on infrastructure, unemployment benefits, and education. A drawback is that overdoing Keynesian policies increases inflation.

Hayek's economic theory

This thoery says that how changing prices relay information that helps people determine their plans is widely regarded as an important milestone achievement in economics

Hayek says that markets will heal themselves and that government should not intervene. Keynes says that governments should intervene in order to soften the blow of a depression/recession.

So, the correct labels for these scenerios are:

Keynes:

A small Caribbean island's economy depends  on tourism. However, in recent times, it has seen  much less economic activity. Its government decides  to let the market correct the situation.

Hayek:

Flour prices have risen in a country where bread is a  staple part of the diet. As a result, bread prices have  risen tremendously. In an effort to make bread affordable  for its citizens, the government has limited how much

bakers can charge for bread.

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