What Would Lead an Economist to Conclude That Theory a Is

question 224

Multiple Choice

What would lead an economist to conclude that Theory A is superior to Theory B?

• A) Theory A predicts real-world events better than does Theory B.
• B) The assumptions underlying Theory A are more realistic than are the assumptions underlying Theory B.
• C) Theory A explains how people think, whereas Theory B only explains what they do.
• D) Theory A is based on the assumption that an individual typically cannot determine what is in his or her own best interest, whereas Theory B assumes that each person knows what is in his or her own best interest and acts accordingly.

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Definitions:

Deductible Taxes

Taxes that can be subtracted from gross income to reduce taxable income, potentially lowering the amount of income tax owed.

Individual Returns

Individual returns refer to tax filings made by individual taxpayers, detailing income, deductions, and taxes owed or refunded.

Personal Property Tax

Taxes imposed on movable properties, such as vehicles and equipment, as opposed to real estate.

Deductible

An expense that can be subtracted from gross income to reduce the amount of income subject to tax, often related to business expenses, healthcare costs, and certain individual deductions.