Which of the following provides the correct interplay between the real world and economic theory?

1) Which of the following provides the correct interplay between the real world and economic theory?

a) Policy leads to economic theory, which then leads to real-world observations.

b) Real-world observations lead to policy, which then leads to economic theory.

c) Real-world observations lead to economic theory, which then leads to policy.

d) Economic theory leads to real-world observations, which then lead to policy.

2) Which of the following statements is true?

a) Solow's assumption about technological progress is that technological advances are predictable from other factors.

b) According to modern economic theory, there are three sources of economic growth.

c) Convergence in the Solow growth model is due to constant marginal product.

d) If people in the United States increased their savings rate, this would lead to less spending and less economic growth.

Solutions

Expert Solution

1.QUESTION- Which of the following provides the correct interplay between the real world and economic theory?

ANSWER- (C) real-world observations lead to economic theory, which then leads to policy.

OTHER OPTIONS ARE NOT SUITABLE FOR THIS QUESTION.

2.QUESTION- Which of the following statements is true?

ANSWER- (B) According to modern economic theory, there are three sources of economic growth.

Explanation-

Economic growth depends on three factors -
1.labor
2.capital
3.technology

Rahul Sunny answered 1 year ago

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