What is the difference between Layer 2 managed switches and Layer 3 managed switches?

Answer:

A Layer 2 managed switch forwards traffic between network hosts such as a server and a client PC within the same subnet. The traffic-forwarding decision is based on its MAC address table entries. However, if the server and the client PC are located on different subnets and the traffic needs to be sent across between subnets, then a Layer 3 managed switch is needed, which makes traffic-forwarding decision based on a map of the IP network maintained in its routing table.