Question

How could prediction lead to better economic decision making

Answer 1

Explanation:  Prediction is an integral and essential part of the economy, because it can gain insight into market conditions in the immediate, near or further future. This is of course done on the basis of many economic indicators and probabilities arising from previous market experience and other economic parameters. This does not mean that the prediction will always prove to be true, or at least in the highest percentage true, but that is why it is called prediction. In any case, experienced economists know how to predict market conditions and make decisions on how, where, what to invest, what will make the best profit, etc. It also implies in what order to invest, what monetary policy should look like. In a word, forecasting can contribute to better economic decision making in order to maximize profits.

Answer 2

In this way knowledge of economics helps individuals and firms to improve the quality of their many decisions. Thus governments and other organizations use knowledge and methods of economics in a more direct way to take decisions on fiscal policies, taxation rates, and other economic regulations.