Economists' attempts to explain the term structure of interest rates
A)illustrate how economists modify theories to improve them when they are inconsistent with the empirical evidence.
B)illustrate how economists continue to accept theories that fail to explain observed behavior of interest rate movements.
C)prove that the real world is a special case that tends to get short shrift in theoretical models.
D)have proved entirely unsatisfactory to date.

Question

Quizplus · Accepted Answer

Economists have modified their theories over time to more accurately explain the term structure of interest rates based on empirical evidence. This demonstrates how economists refine their theories to improve their accuracy in explaining real-world phenomena.

Economists' Attempts to Explain the Term Structure of Interest Rates