Question

Which development laid the foundation for macroeconomics as a separate field of study?

Options

• The focus on individual commodity markets

• The assumption of full capacity utilization by classical economists

• The analysis of aggregate economic behaviour in Keynes’s General Theory

• The rise of unemployment from 3% to 25% without a new framework

Answer 1

Keynes’s analysis of aggregate economic behaviour in the General Theory laid the foundation for macroeconomics. It supplied a framework for studying the economy as a whole.