Question

Economic theory assumes that voters, politicians, and other political participants are largely motivated by

a. personal self-interest.

b. altruism.

c. a desire to promote the general welfare.

d. a desire to promote allocative economic efficiency.

Answer 1

The correct option is A). personal self-interest.

Economic theories try to explain economic phenomena, to interpret why and how the economy behaves, and what is the best to solution how to influence or to solve the economic phenomena. They are a comprehensive system of assumptions, hypotheses, definitions, and instructions that should be done in a certain economic situation. In principle, the approach to economic theory is divided into positive and normative. All economic theories used to explain specific situations or problems in the economy of some of its models. These models of economic systems try to explain the situation and solve it using approaches that are typical of the economic theory (eg. Keynesian theory subdued stimulate the economy through government money).