Stephen Develops a Theory That Could Explain the Fundamental Nature

question 4

Multiple Choice

Stephen develops a theory that could explain the fundamental nature of the universe. The only problem is there is no way to empirically measure his variables. Therefore, the theory is not ______.

• A) valid
• B) parsimonious
• C) testable
• D) scaled

---

Definitions:

Nominal Interest Rate

The interest rate before adjustment for inflation, representing the face value of financial transactions.

Real Interest Rate

The interest rate that accounts for inflation, reflecting the actual cost of borrowing and the real return on savings.

Inflation Rate

The level of acceleration in the overall pricing of goods and services, resulting in a decline in buying efficiency.

Nominal Interest Rate

The rate of interest before adjusting for inflation, representing the face value of interest payments made on savings or loans.