Define the Two Tests That Will Help You Make Reasonable

question 71

Essay

Define the two tests that will help you make reasonable inferences from the data gathered for your business report.
First is the test of experience. In applying this test, the writers use the underlying theme in all scientific methods-reason. They ponder on each interpretation they make, asking themselves, "Does this appear reasonable in light of all we know or have experienced?"
Second is the negative test, which is a critique of the writers' own conclusions. Here, they consider what a skeptic or "devil's advocate" might say about their interpretations. By considering the opposing viewpoint, they make their interpretations more reliable.

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Definitions:

Classical Macroeconomic Theory

A school of thought in economics that emphasizes the role of free markets in ensuring economic efficiency and suggests that government intervention in those markets should be minimal.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the real quantity of goods and services produced.

Money Supply

Refers to the total amount of money—cash, coins, and balances in bank accounts—available in an economy at a specific time.

Classical Macroeconomic Theory

An economic theory that posits that markets function efficiently and that full employment is achieved when economies operate at a state of equilibrium without government intervention.