An Economic Model That Sometimes Makes Incorrect Predictions Can Be

question 200

Multiple Choice

An economic model that sometimes makes incorrect predictions can be used by economic decision makers:

• A) under no circumstances.
• B) only if it assumes a positive correlation between the variables being analyzed.
• C) if it is mathematical.
• D) if it is simple enough for a child to understand.
• E) until a better model is developed.

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Definitions:

Dividend Policy

Dividend policy is the set of guidelines a company follows in deciding how much of its profit will be distributed to shareholders as dividends and how much will be reinvested in the business.

New Equity

New equity refers to funds raised by a company through the issuance of additional shares of stock.

Compromise Policy

A strategy aimed at finding a middle ground among different stakeholders' interests or policy alternatives.

Dividend Policy

A company's strategy or set of guidelines for distributing earnings to shareholders in the form of dividends.