ABSTRACT
Economics studies the choices for the use of those resources made by individuals, firms, governments, and society as a whole. Macroeconomics is the study of the behavior of the economy as a whole. The idea is to understand the determinants of aggregate economic activity – the total output of goods and services and its main components, unemployment, inflation, and other indicators of aggregate economic activity. Macroeconomics is concerned with identifying policies that will improve the performance of the aggregate economy, such as reducing the volatility of the economy and keeping unemployment and inflation low. The General Theory was written during the depths of the Great Depression of the early 1930s, and it can be regarded as the founding document for the field of macroeconomics. The economic theory of the time, which Keynes called the postulates of classical economics and dismissed in a few pages, was not capable of providing an explanation of these overwhelming facts.
