Classical macroeconomics was dealt severe blows by:
A) the Great Depression and Keynes's macroeconomic theory.
B) the Second World War and the writings of Milton Friedman.
C) Adam Smith and his idea of the invisible hand.
D) the strong recovery after the Second World War and Alvin Hansen's stagnation thesis.

Question

Quizplus · Accepted Answer

The Great Depression exposed the limitations of classical macroeconomic theory, leading to the development of Keynesian economics, which emphasized the role of government intervention in stabilizing the economy. This challenged the classical belief in laissez-faire policies and the self-correcting nature of markets.

Classical Macroeconomics Was Dealt Severe Blows By