An economic model is
A)tested by examining the realism of its assumptions.
B)useful if it predicts well,even if its assumptions are not realistic.
C)tested by the Testing Committee of the Canadian Economic Association.
D)not useful unless it predicts with 100 percent accuracy.
E)not useful because it simplifies real problems.

Question

Quizplus · Accepted Answer

Economic models are considered useful if they can accurately predict outcomes, even if the assumptions they are based on are not entirely realistic. This is because simplification is a necessary part of model-building to focus on key variables and relationships.

An Economic Model Is