Economic models:
A)are of limited use because they cannot be tested empirically.
B)are limited to variables which are directly related to one another.
C)emphasize basic economic relationships by abstracting from the complexities of the real world.
D)are unrealistic and therefore of no practical consequence.

Question

Quizplus · Accepted Answer

Economic models are simplifications of the real world and therefore abstract from certain complexities. They emphasize fundamental economic relationships, making them useful for analyzing specific scenarios and making predictions. However, they are not meant to be precise reflections of reality, and their usefulness is limited by the accuracy of the assumptions and data used to construct them.

Economic Models