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

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.