Scientific theory – use and limitation

Scientific theory – use and limitation

In economic, there are lots of issues or problems. Every theory will be developed for some critical issue or problems and try to bring some outcomes from them. May be, these outcomes are for single or multiple use. These theories predict the future events or solutions for any problems. But every theory has some use and also has some limitations.

Scientific theory – use and limitation

Use of theories –

ü  These theories provides economic tools to short out the particular problems or multiple problems

ü  These theories are able to explain every economic factor or issue or phenomena. Always choose the relevant factor for this.

ü  These theories provide us a base on which predicts the relevant economic events. It also helps to find out the economic issue or problems in current time frame.

ü  These theories also help us to judge the economic performance and also find out the faulty factor.

ü  These theories also help us to understand the economy and its relations with different – 2 factor or issue or problems. It also helps us to form future policies and coordination between different policies.

Limitation of theories –

ü  Economy do not have accurate data to make a better theory or policy

ü  Nobody or any theory will not be able to predict to future event or issue accurately

ü   Human being live in society so that all its behaviour is not rational

ü  Every theory will be developed on the basic of assumptions but these assumptions is not real

ü  These theories did not applicable in all situations. Every theory will be formed for different issue or problems because situations will not be remain same for whole times.