What Happens When Economists Test Theories

question 220

Multiple Choice

What happens when economists test theories?

• A) They must make do with whatever data the world gives them.
• B) They can manipulate conditions easier than other scientific fields.
• C) They can enlist the government's help to manipulate economic conditions.
• D) They can achieve statistically valid results with much smaller sample sizes.

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Definitions:

Stop-Loss

An order placed with a broker to buy or sell once the stock reaches a certain price, designed to limit an investor's loss on a security position.

Shelf Registration

Advance registration of securities with the SEC for sale up to 2 years following initial registration.

Primary Market

The financial market for new issues of securities, where buyers purchase directly from the issuer.

Stop-Buy Order

An order to purchase a security once its price surpasses a particular point, typically to limit a loss or protect a profit on a short sale.