Question

Who is known as the father of Macroeconomics ?

• A. Adam Smith
• B. Keynes
• C. Robertson
• D. Friedman

Hint:

Remember the key distinction: Adam Smith = Father of Economics (Classical, Micro-focused). John Maynard Keynes = Father of Macroeconomics (Aggregate Demand, Government Intervention).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
This question asks to identify the economist who is considered the founder of modern macroeconomics as a distinct field of study.

Step 2: Detailed Explanation:
\begin{itemize} \item John Maynard Keynes is widely regarded as the father of modern macroeconomics. Before Keynes, classical economics (led by figures like Adam Smith) focused primarily on microeconomic issues and assumed that economies would self-regulate to achieve full employment.
\item The Great Depression of the 1930s challenged these classical views. In response, Keynes published his seminal work, "The General Theory of Employment, Interest and Money" in 1936.
\item This book introduced revolutionary concepts such as aggregate demand, the consumption function, the multiplier effect, and the role of government intervention (through fiscal policy) to manage economic downturns and unemployment. This laid the foundation for the study of the economy as a whole, i.e., macroeconomics.
\item Adam Smith is considered the father of modern economics in general, not specifically macroeconomics.
\item Milton Friedman was a later economist who led the monetarist school of thought, which was a major counter-argument to Keynesian economics.
\end{itemize}

Step 3: Final Answer:
John Maynard Keynes is known as the father of Macroeconomics.