Question

Economic theory offers ____________________ about the full range of possible events and responses, which can prevent __________________ about how households will respond to changes in prices or incomes.

Answer 1

(B) a systematic way of thinking; misguided conclusion

Step-by-step explanation:

Economic theory offers a step by step approach to a wide range of events that may occur and likely responses to be adopted which can help prevent misguided conclusions about how households will respond to changes in prices or incomes. Since households are the basic unit of every economy, the economic theory is useful to the understanding of economic policy of nations. Economic theories are a system of assumptions, hypotheses, definitions and instructions that attempts to explain economic situations, to interpret why and how the economy behaves the way it does, and to proffer the best to solutions in influencing or to solving the economic problems. Doing so helps prevent misguided conclusions to phenomena that might result in wastage of time and worsening of economic conditions.

Answer 2

The correct answers to fill in the blanks are:

“a systematic way of thinking”

and

“misguided conclusions”

Economics uses theories and extensive research to determine the flexibility of two most important factor, price and demand on a household. Economics helps us answer the how and the why of the financial side of the country.