The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression.
B) the presence of both high unemployment and high inflation during the 1970s.
C) theoretical proof that classical ideas were invalid.
D) evidence that classical ideas were useful during economic booms, but not during economic recessions.

Question

Quizplus · Accepted Answer

The Great Depression, with its high levels of unemployment, challenged the classical view that markets are always self-correcting and led to the development of Keynesian economics.

The Primary Factor That Caused Most Economists to Lose Their