Economists at the Department of Finance in Ottawa employ an economic model that predicts the effects of an increase in the GST.After implementation of the change,suppose researchers find that the empirical data is in conflict with the model's prediction.They are likely to

Question

Quizplus · Accepted Answer

When empirical data is in conflict with a model's prediction, it typically indicates that there is a flaw in the underlying assumptions or parameters of the model. Therefore, the best course of action would be to modify the model in light of the newly acquired empirical knowledge to create a more accurate and reliable representation of the real world. A and D are incorrect because they assume that the model is infallible and cannot be improved or revised. B and E are also incorrect because they suggest either ignoring or distorting the empirical data, which would undermine the credibility and validity of any findings or policy recommendations based on the model.

Economists at the Department of Finance in Ottawa Employ an Economic