Which of the Following Is True

question 67

Multiple Choice

Which of the following is true?

• A) Economists formulate a theory and then sometimes try to verify the theory with real-world observations.
• B) Real-world observations are used to formulate an economic theory,but this is of little use to policymakers.
• C) Once an economic theory is developed,it is rarely tested against real-world observations.
• D) When a policymaker has an idea about how to advance economic growth,he or she will ask an economist to formulate a theory,and then this will be compared to real-world observations.
• E) Real-world observations motivate economists to formulate theories about how economic growth evolves,and these theories are then used and reevaluated as new data become available.

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Definitions:

Tax Liability

The total amount of taxes owed by an individual or a corporation to the tax authorities.

Negative Income Tax

A proposed system of social security that guarantees a minimum income to all, where those earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Income Subsidy

An income subsidy is a government-provided financial assistance program intended to boost an individual's income to a level sufficient for meeting basic living standards.

Negative Income Tax

A program where the government provides additional income to those who earn under a specific threshold, rather than collecting taxes from them.