An economic theory:
A) provides a formal explanation of the relationship between economic variables.
B) is an action taken to change an economic condition.
C) usually requires no assumptions to be made.
D) cannot be tested using data.

Question

Quizplus · Accepted Answer

Economic theories provide formal explanations of the relationships between economic variables, often involving assumptions to simplify complex economic processes for analysis. They can be tested using data, contrary to options B, C, and D.

An Economic Theory