An Economic Theory Is Tested By

question 118

Multiple Choice

An economic theory is tested by:

• A)​assessing the realism of its assumptions.
• B)​polling economists to see if there is consensus as to the validity of the hypothesis.
• C)​comparing and contrasting its simplicity with related theories.
• D)​comparing its predictions with real-world data.

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Definitions:

Shares

Portions of ownership in a corporation, representing a claim on part of its assets and earnings.

Dividend Yield

A financial ratio indicating how much a company pays out in dividends each year relative to its stock price, used by investors to gauge return on investment.

Dividend Income

Income received from owning shares of a company, distributed from the company's earnings.

Shares

Financial instruments representing ownership in a corporation or asset, designed to split dividends equally among holders when profits are made.