If the theory behind an economic model fits the data poorly,you would probably want to
A)use the theory to predict what would happen if the economic setting or economic policies change.
B)start from scratch with a new model.
C)enrich the model with additional assumptions.
D)restate the research question.

Question

Quizplus · Accepted Answer

If the theory behind an economic model fits the data poorly, starting from scratch with a new model would be the best choice to improve the accuracy and reliability of the model. Enriching the model with additional assumptions or restating the research question may not necessarily address the fundamental issues with the theory behind the model. Using the theory to predict what would happen with changes in the economic setting or policies may not be reliable if the model does not fit the data well.

If the Theory Behind an Economic Model Fits the Data