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Answer :
Final answer:
Classical macroeconomics believed in the self-correcting nature of the economy, but the Great Depression challenged this view, leading to the rise of Keynesian economics.
Explanation:
The basic assumptions of the classical school of thought in macroeconomics, prevailing before the Great Depression, emphasized the economy's ability to reach full employment equilibrium on its own.
**The severity and duration of the Great Depression** dealt a significant blow to this view as the economy struggled to self-correct, leading to mass unemployment and prolonged economic downturn.
Keynesian economics emerged as a contrasting perspective advocating for active government intervention to stabilize the economy during recessions, shifting the mainstream economic thought away from classical views.
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