Question

When an economist is conducting empirical analysis, she

A compares real-world data with a theory's implications.
B. makes provisional assumptions to get ready to test a theory
C. compares her written analysis with the writings of others on the same topic.
D. creates a mathematical model and tests it with hypothetical numeric data,

Answer 1

An economist conducting empirical analysis compares real-world data to the predictions of economic models, utilizing tools like diagrams and graphs to derive and validate economic theories against observed outcomes.Answer is option a.

Step-by-step explanation:

When an economist is conducting empirical analysis, their primary goal is to compare real-world data with a theory's implications. This involves deriving models based on economic theories, expressed as diagrams, graphs, or mathematical equations, and then testing these models against actual data to see how well they predict economic outcomes.

For example, an economist might create a model to forecast stock market trends and then compare the model's predictions with the actual points on the stock market index as trading closes each day.An economist conducting empirical analysis compares real-world data to the predictions of economic models, utilizing tools like diagrams and graphs to derive and validate economic theories against observed outcomes.