This hands-off approach to economics was known as laissez-faire and it emphasized minimal governmental interference in the economy. The classical view of macroeconomics derives its main principles from 18th-century Scottish philosopher and economist Adam Smith’s theory of self-regulating markets and was further developed in the early 19th century by British economist David Ricardo. Related: Understanding Economics: Indicators, Types and Why Economists Are Important History of macroeconomics Macroeconomics connects the multiple policies, resources and technologies that make economic development happen. Governments and corporations use macroeconomic models to formulate economic policies and strategies while understanding and predicting the long-term consequences of their decisions. Studying macroeconomics allows you to understand how certain factors can affect an economy and its people. It attempts to measure how well an economy is performing, understand what forces drive it and project how performance can improve. Macroeconomics helps you understand how an economy reacts to certain stimuli and how certain industries affect the entire economy. Macro is a prefix that means large or long, so macroeconomics refers to the large-scale study of an overall economy. Macroeconomics is a study of economics that focuses on how a national or regional economy–including its markets, businesses, consumers and governments–behaves as a whole.
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