ECONOMICS

Detailed explanation-1: -In a numerical (or otherwise) model, the Sensitivity Analysis (SA) is a method that measures how the impact of uncertainties of one or more input variables can lead to uncertainties on the output variables.

Detailed explanation-2: -Conducting sensitivity analysis provides a number of benefits for decision-makers. First, it acts as an in-depth study of all the variables. Because it’s more in-depth, the predictions may be far more reliable. Secondly, It allows decision-makers to identify where they can make improvements in the future.

Detailed explanation-3: -A Financial Sensitivity Analysis, also known as a What-If analysis or a What-If simulation exercise, is most commonly used by financial analysts to predict the outcome of a specific action when performed under certain conditions.

Detailed explanation-4: -Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be divided and allocated to different sources of uncertainty in its inputs.