Macroeconomic theory that emphasized the theories of Keynes and de-emphasized the classical theory developed as the result of the failure of ?
Correct answer: B. The classical model to explain the prolonged existence of high unemployment during the Great Depression
- A. economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s
- B. The classical model to explain the prolonged existence of high unemployment during the Great Depression
- C. fine tuning during the 1960s
- D. the economy to grow at a rapid rate during the 1950s
Explanation
Keynesian macroeconomics gained prominence because classical theory could not explain the prolonged mass unemployment of the Great Depression. The 1970s problem of simultaneous inflation and unemployment instead contributed to the rise of monetarist and new classical approaches.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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