According to Kindleberger, “An economic theory is a statement of the relationship among economic variables. It is a simplified representation of a real situation. Economic theories are broadly divided into two groups- Micro and Macro economic theories. A micro economic theory explains the relationship between two individual variables. A macro economic theory expresses the relationship between two aggregate variables. PPT describes Economic theory and its special features

2. Theory
 Theories are sets of concepts and
generalizations so arranged to
explain and predict possible
relationship among phenomena.
 A theory is a simplified
representation of how two or more
variables interact with each other
 simplify it down to its essentials.
 A theory or model may be expressed in
words, charts, diagrams or in
mathematical form

4.  According to Kindleberger, “An economic
theory is a statement of relationship
among economic variables.
 It is a simplified representation of a real
situation.
 Economic theories are broadly divided
into two groups- Micro and Macro
economic theories.
 A micro economic theory explains the
relationship between two individual
variables.
 A macro economic theory expresses the
relationship between two aggregate
variables

5. The construction of an economic theory
is just like the step by step construction
of a building.
Generalization form the hypothesis
Testing and verification

6. Characteristics of Economic
theories
An economic theory explain
economic situation.
Economic theories, though
scientific in character, are
being revised and sometimes
refuted.
Statistically hypothetical

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