Which of the following best describes how economists test the empirical predictions of economic models?
A) Economists survey individuals to learn about how people think through decisions about how much to purchase or to produce.
B) Economists collect and analyze real-world observations of people's actions to discern if those actions accord with theories' predictions.
C) Based on theories about thought processes, economists seek to determine which thought processes predominate in determining how a person decides what actions to take.
D) Recognizing that people always do what they say they will do, economists rely exclusively on information gleaned from polls and surveys conducted by poll takers and market researchers.

Question

Quizplus · Accepted Answer

Economists test the empirical predictions of economic models by collecting and analyzing real-world observations of people's actions to discern if those actions accord with theories' predictions. This process is often referred to as empirical analysis.

Which of the Following Best Describes How Economists Test the Empirical