What Is the Best Test of an Economic Theory

question 145

Multiple Choice

What is the best test of an economic theory?

• A)the accuracy of the assumptions behind the theory
• B)the ability of the theory to predict real-world events
• C)the implications of the theory for current public policy
• D)how much mathematical detail is behind the theory

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Definitions:

NLRB

The National Labor Relations Board is a federal agency responsible for enforcing U.S. labor laws regarding collective bargaining and handling complaints of unfair labor practices.

Union Instrumentality

The perceived effectiveness of labor unions in achieving desired outcomes such as higher wages, job security, and better working conditions for their members.

Utility Maximization

The economic principle that individuals or entities attempt to obtain the greatest satisfaction or utility from their available resources.

General Beliefs

Widely held opinions or convictions concerning various topics or principles.