cannot render macro, "macro" is undefined

Creating a test macro throws the error in the project.yml file when debugging: Compilation Error
Could not render {{ test_macro() }}: ‘test_macro’ is undefined

dbt version: 1.7.0

Nothing seems to be wrong with the dbt syntax
– macros/test_macro.sql

{% macro test_macro() %}
{{ return(‘test_schema’) }}
{% endmacro %}

+generate_schema_name: “{{ test_macro() }}”

I’m sure there would be a simple explanation for this, but very glad if someone could point me in the right direction. Thanks!