Consider the following statements relating to classical theory of employment1. Classical theory is based on the assumption of full employment2. Classical version of full employment is a situation where involuntary unemployment is present3. Classical version of full employment is consistent with seasonal unem ploym ent and frictional unemployment4. Classical economists advocated wage cuts to reduce the unemployment level Which of the above statements are correct?

Macroeconomics is a branch of economics that studies how an overall economy—the market or other systems that operate on a large scale—behaves.