An economic theory
A)will be useful only if all human behaviour is rational.
B)will be useful as long as it is logically consistent.
C)is only useful if its underlying assumptions are realistic.
D)will predict more accurately if it contains a greater number of mathematical equations.
E)must be judged on its ability to explain and predict real- world phenomena.

Question

Quizplus · Accepted Answer

An economic theory is judged on its ability to explain and predict real-world phenomena, regardless of the realism of its assumptions or the number of equations it contains.

An Economic Theory