The basic purpose of economic models is to
A)construct simplifying assumptions about the real world
B)explain reality in all its complexity
C)collect empirical data to support the facts
D)construct situations where controlled experiments can be carried out
E)provide explanations for, and predictions of, economic events

Question

Quizplus · Accepted Answer

The basic purpose of economic models is to provide explanations for, and predictions of, economic events. While economic models may rely on simplifying assumptions, their ultimate goal is to explain and predict the behavior of economic agents and the outcomes of economic interactions. Economic models are not designed to directly explain reality in all its complexity, collect empirical data, or construct controlled experiments.

The Basic Purpose of Economic Models Is to