Final answer:
True, the classical policy approach to the business cycle was to let the market self-correct without government intervention. This view changed after the Great Depression, leading to the rise of Keynesian economics.
Step-by-step explanation:
The classical policy approach to the business cycle did indeed advocate for allowing the market to correct itself, which is true. The classical view posited that economic fluctuations would self-adjust, with flexible prices guiding the market back to full employment without the need for government intervention. This preference for a 'hands off' policy rested on the belief that any active fiscal or monetary policies would lead to inflation rather than an increase in GDP. However, the Great Depression's profound impacts called this classical view into question, paving the way for Keynesian economics, which encouraged government intervention to manage weak aggregate demand and stabilize the business cycle.