statement to show how each part of an economy is related to all the other parts. Wesley Clair Mitchell, an American, urged economists to use statistics in testing their theories. Mitchell also studied booms and depressions.

The Great Depression of the 1930's caused economists to seek a new explanation of depressions. John Maynard Keynes, a British economist, attacked the idea that free markets always lead to prosperity and full employment. In The General Theory of Employment, Interest and Money, Keynes suggested that governments could help end depressions by increasing their own spending.

During the 1960's and 1970's, a group of economists called monetarists rejected many of the theories of Keynes and his followers. Instead, the monetarists urged that governments increase the money supply at a constant rate to stabilize prices and promote economic growth. Milton Friedman, an American economist, became the leading spokesman for monetarism.

Research today generally centres on understanding the relationship between various parts of the economy. Economists base their findings on observation, on case studies, and on other methods of research. Many economists emphasize the use of mathematics and statistics in testing economic theories. Their method is known as econometrics. Economic analysis has been applied to many problems that seem unrelated to production, such as education, family life, and government. Whenever resources available to achieve an objective are limited, economic analysis may be useful.