Which event led to the development of macroeconomic theory that highlighted Keynesian ideas and reduced emphasis on classical economics?

Show Answers

The inability of economic theories to account for rising inflation and unemployment occurring together in the 1970sThe failure of the classical economic framework to explain the extended period of high unemployment during the Great DepressionThe shortcomings of economic fine-tuning efforts during the 1960sThe economy's inability to sustain rapid growth throughout the 1950sThe collapse of international trade after World War II

Explanation

The Keynesian approach gained prominence because the classical economic model could not adequately explain the persistent high unemployment experienced during the Great Depression, prompting a shift in macroeconomic thought.