What is the basis of a good economic theory?
A) It explains economic behaviour and predicts well.
B) It rests on assumptions.
C) It always provides a highly detailed analysis of an economic sector.
D) It can best be expressed mathematically.

Question

Quizplus · Accepted Answer

A good economic theory should explain economic behavior and be able to make accurate predictions.

Answer: B
 Economic theories are built on assumptions, which serve as the foundation for the theory.

Answer: C
 A highly detailed analysis of an economic sector is not a requirement for a good economic theory.

Answer: D
 While some economic theories can be expressed mathematically, it is not a necessary characteristic of a good theory.

What Is the Basis of a Good Economic Theory