Question

drag each label to the correct location on the table.

match each economist to the scenario that exemplifies his economic philosophy.

scenario 1:
a small caribbean islands 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.

scenario 2:
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.

labels:
keynes
hayek

Explanation:

Analyze the first scenario

The first scenario describes a government choosing to let the market self-correct during an economic downturn. This hands-off approach (laissez-faire) and belief in the self-regulating nature of free markets aligns with the economic philosophy of Friedrich Hayek.

Analyze the second scenario

The second scenario describes a government actively intervening in the market by setting price controls (limiting how much bakers can charge for bread) to protect consumers. This belief in active government intervention to manage economic outcomes aligns with the economic philosophy of John Maynard Keynes.

Answer:

Scenario	Economist
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.	Keynes