When Testing Theories,economics Is Disadvantaged Compared to the Natural Sciences

question 127

Multiple Choice

When testing theories,economics is disadvantaged compared to the natural sciences because

• A)it deals with human behaviour and thus is not open to empirical testing.
• B)it is usually not possible to conduct controlled experiments in economics,in contrast with certain other sciences.
• C)economic hypotheses cannot be accepted with complete certainty,by contrast with the other sciences.
• D)economic variables do not change enough to provide reliable data for testing hypotheses.
• E)some economic variables are determined within the theory.

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even point; measures the risk of not covering fixed costs.

Liabilities to Stockholders' Equity

A ratio that measures the amount of liabilities a company has compared to its shareholders' equity.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate sales or revenue; it is calculated by dividing net sales by average total assets.

Long-term Investments

Investments made with the intention to hold for more than one year, typically in bonds, stocks, or real estate, aiming for long-term capital growth.