Which Statement Best Describes the Way Economists Study the Economy

question 8

Multiple Choice

Which statement best describes the way economists study the economy?

• A) Economists study the past, but do not try to predict the future.
• B) Economists use a probabilistic approach based on correlations between economic events.
• C) Economists devise theories, collect data, and then analyze the data to test the theories.
• D) Economists use controlled experiments much the same way a biologist or physicist does.

---

Definitions:

Investors

Individuals or organizations that allocate capital with the expectation of receiving financial returns.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, such as issuing debt or stock.

Creditors

Individuals, businesses, or financial institutions that are owed money by debtors or customers.

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.