How is an economic hypothesis tested?
A) by comparing the hypothesis's prediction to real-world data
B) by using a controlled experiment
C) by assessing the realism of its assumptions
D) by assessing the level of descriptive detail

Question

Quizplus · Accepted Answer

An economic hypothesis is tested by comparing its prediction to real-world data. This is the best way to determine if the hypothesis accurately explains or predicts economic behavior. A controlled experiment is not always possible in economics as many factors cannot be easily controlled. Assessing the realism of assumptions is important in developing an hypothesis, but it is not a test of the hypothesis. The level of descriptive detail is important for clarity, but it does not determine if the hypothesis is accurate.

How Is an Economic Hypothesis Tested