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Which of the following conditions is necessary for a theory to be​ useful?

A. It must include all markets.
B. It must be applicable to all economic models.
C. It must have implications that can be tested by empirical analysis.
D. It must be applicable to all situations found in the real world.
E. All of the above conditions must hold for a theory to be useful.

User Sound
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Final answer:

The necessary condition for a theory to be useful is that it has implications that can be tested by empirical analysis. This allows for the objective evaluation of the theory's validity against real-world observations.

Step-by-step explanation:

To determine which condition is necessary for a theory to be useful, we must consider the properties that define a useful theory. While it's not required for a theory to include all markets or to be applicable to all economic models or all situations in the real world, it's essential that a theory's implications can be tested through empirical analysis. The ability to test a theory's predictions against observations in the real world is a key factor in determining its usefulness. This empirical testing helps to assess the accuracy of the theory and whether it can provide reliable explanations or predictions.

Therefore, the correct answer from the given options would be C. It must have implications that can be tested by empirical analysis. A theory that cannot be empirically tested is not considered scientifically useful because there is no objective method to verify its validity or to falsify its claims.

User Raj Chaurasia
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