Which of the following is an example of an economic theory?
A) The actual behavior of the economy over a one-year period.
B) A tax cut to increase spending by businesses and households.
C) Statistics showing the change in the unemployment rate since 2008.
D) An explanation as to why raising the price of a product would cause people to buy less of that product.

Question

Quizplus · Accepted Answer

Economic theories are conceptual frameworks for explaining how economic processes work. Option D, which explains the relationship between price and demand (a fundamental concept in economics known as the law of demand), is an example of an economic theory. It provides a general explanation of behavior rather than specific empirical data or policy actions.

Which of the Following Is an Example of an Economic