Which Statement Below Best Illustrates the "Art," Rather Than the "Science

question 61

Multiple Choice

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

• A) Macroeconomic data provides the motivation for new macroeconomic theory.
• B) Macroeconomic relationships can be expressed using symbols and equations.
• C) Macroeconomists must determine which simplifying assumptions clarify our thinking and which mislead us.
• D) Graphs and charts can be used to illustrate the history of macroeconomic variables.

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Definitions:

Required Return

The least annual profit percentage that attracts firms or individuals to place investments in a specific security or project.

Dividend Yield

A ratio reflecting the yearly dividend payments of a company as a proportion of its stock price.

Stock Price

Stock price is the current market price at which a share of stock can be bought or sold, reflecting the value that the market assigns to a company.

Required Return

The minimum return that investors expect to earn on their investment to compensate for its risk.