Economics is called an empirical science because
A) economists study real-world evidence to test their models.
B) economists use assumptions in their models.
C) economic models have no predictive power.
D) economic analysis is only useful in a capitalistic society.
A
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When the goods market is returning to equilibrium following a decrease in the real interest rate, ________
A) saving and output are both rising B) saving and output are both declining C) saving is rising, while output declines D) all of the above E) none of the above
If the dollar/pound exchange rate is $2/£, a Big Mac costs $5 in New York City and costs £2 in London, the pound is ________, and U.S. tourists will be ________
A) overvalued; better off in London B) overvalued; better off in New York C) undervalued; better off in London D) undervalued; better off in New York