What Is the Basis of a Good Economic Theory

question 88

Multiple Choice

What is the basis of a good economic theory?

• A) It relies on simplifying assumptions in order to explain economic behaviour.
• B) It does not rely on simplifying assumptions.
• C) It includes every detail that affects the economic behaviour of interest.
• D) It relies on conducting uncontrolled experiments.

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Definitions:

Skewed Right

A distribution of data where the tail on the right side of the distribution is longer or fatter than the left side.

Normal Distribution

Normal Distribution is a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Skewed Right

A distribution that has a tail on the right side, indicating that the majority of data points are concentrated on the left.

Homeowners

Individuals or entities that own and typically reside in a residential property.