Question

Which branch of macroeconomics
specifically focuses on the problem of
developing economies?

Answer 1

Development economics

Answer 2

Classical economics is a branch of macroeconomics specifically focuses on the problem of developing economies.

1. Classical theory is more relevant to developing economies in determination of income and employment.
2. It is so because classical theories suggested that income and employment increases as a result of increased capital accumulation and reinvestment of the profits.
3. Classical economy like developing economies had their employment and income based on surpluses, where surpluses were reinvested to increase production and thus increase employment.
4. This would deal with population explosion one of the main problem of developing economy.
5. Capital accumulation will allow to overcome capital scarcity in the economy.