Read the following passage.
In the late nineteenth century, the American Institutionalist school of economics emerged as a robust challenge to classical economic orthodoxy. Classical economists posited a market driven by rational, utility-maximizing individuals operating within a framework of perfect information, naturally tending toward equilibrium. Institutionalists, conversely, argued that economic behavior is fundamentally shaped by evolving social conventions, embedded habits, and legal strictures—what they broadly termed "institutions." For Institutionalists, the classical reliance on deductive mathematical models was fundamentally misguided because such models necessarily abstracted away the idiosyncratic social realities governing human exchange. Instead, Institutionalists championed a descriptive, inductive approach rooted in historical observation.
Modern methodological critics of Institutionalism have frequently characterized the movement as theoretically adrift. These critics maintain that by substituting sociological description for mathematical generalization, Institutionalists sacrificed the discipline's predictive utility. From the perspective of these critics, because Institutionalism lacked a core set of unifying deductive axioms, it was relegated to merely cataloging past economic phenomena rather than providing a systematic apparatus capable of forecasting market responses to novel policy interventions.
Based on the passage, the "modern methodological critics of Institutionalism" would be most likely to agree with which of the following statements?
- AIntegrating sociological observations into an economic framework will inevitably eliminate that framework's capacity for predictive forecasting.
- BDeductive mathematical models are valuable primarily because they deliberately abstract away the idiosyncratic social realities that complicate economic analysis.
- CIn order to accurately understand economic phenomena, theorists must abandon generalized mathematical abstraction in favor of descriptive sociological observation.
- An economic theory's ability to systematically forecast market responses to new interventions requires a foundation of unifying deductive axioms.Answer
- EThe classical economic assumption of utility-maximizing individuals constitutes the only set of deductive axioms capable of effectively evaluating policy outcomes.