To be useful, macroeconomic models
A) must be complete, accurate descriptions of the world.
B) never generates testable hypothesis.
C) must be simple.
D) provides a lot of intricate details.
E) must be extremely realistic.

Question

Quizplus · Accepted Answer

Macro models must strike a balance between simplicity and accuracy. They cannot be overly complex, or they may lack usefulness and transparency. However, they also cannot be overly simplistic, or they may leave out important factors and fail to accurately describe the world. Therefore, the best choice is C, which recognizes the importance of simplicity in macroeconomic models.

To Be Useful, Macroeconomic Models