Which of the following is not one of the reasons why it is difficult to empirically test alternative macroeconomic models against one another?
A) The rational-expectations assumption is difficult to test.
B) Macroeconomic models differ in ways that are hard to standardize for.
C) Macroeconomic models cannot be expressed in mathematical terms.
D) The amount of data available is fairly small.

Question

Quizplus · Accepted Answer

Macroeconomic models are typically expressed in mathematical terms, so this is not a valid reason for why it is difficult to test them against one another. The other three options are valid reasons. The rational-expectations assumption is difficult to test because it assumes that people have perfect information and can accurately predict future events, which is not always the case. Macroeconomic models differ in ways that are hard to standardize for because they use different assumptions and frameworks to explain macroeconomic phenomena. Lastly, the amount of data available for macroeconomic analysis is often limited, which can make it difficult to draw conclusive comparisons between models.

Which of the Following Is Not One of the Reasons