Question

The main steps in developing and testing an economic model or thecry are each of the following EXCEPT:

A. state the research question.
B. make provisional assumptions that describe the economic setting and the behavior of the econemic actors.
C. prove that the assumptions are valid.
D. work cut the implications of the theory.
E. conduct an empirical analysis to compare the implications of the theory with the data.
F. evaluate the results of your comparisons.

The criteria for a useful theory or model are each of the following EXCEPT:
A. it has reasonable and realistic assumptions.
B. it covers all possible situations.
C. It is understandable and manageable enough for studying real problems.
D. its implications can be tested empirically using real-world data.
E. its implications are consistent with the data.

Answer 1

The main steps in developing an economic model or theory do not include proving that assumptions are valid, nor does a useful theory need to cover all possible situations.

Economists use economic theories to gain insights, which involve creating assumptions and empirically testing implied outcomes.

Step-by-step explanation:

The main steps in developing and testing an economic model or theory do not include proving that the assumptions are valid. Instead,

the steps are: A. stating the research question, B. making provisional assumptions that describe the economic setting and the behavior of the economic actors, D. working out the implications of the theory, E. conducting an empirical analysis to compare the theory's implications with data, and F. evaluating the results of your comparisons. As for the criteria for a useful theory or model,

it is not necessary for a theory to cover all possible situations.

Economists use theories as tools, similar to a carpenter's toolkit, expressing them through diagrams, graphs, or mathematical equations.

They apply these theories to derive insights about economic issues or problems. A useful economic theory has reasonable and realistic assumptions, is understandable and manageable, has implications that can be tested empirically, and has implications consistent with data but does not need to cover every possible situation.