Hypothesis testing is a process by which an analyst tests some assumptions.The methodology employed by the economists depends on the nature of the data used, and the goals of the analysis. Hypotheses can be tested empirically (by reference to the facts revealed in the study) or logical (using interpretation of concepts, logical model of the concept). Another way to test a hypothesis is modeling. The economic model is a simplified description of reality, it's a framework designed to illustrate complex processes, often using mathematical techniques.
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