Economic models are simplifications of reality that highlight the most important elements of the economic issue being studied, excluding irrelevant details to focus on the core aspects of the problem.

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An Economic Model Is

Question 152

Multiple Choice

An economic model is

A) a generalisation that summarises all the normative assumptions we make about a particular issue.
B) a statement that describes how the world should be.
C) a description of some aspect of the economic world that includes only those features of the world that are needed for the purpose at hand.
D) a collection of facts that describe the real world.

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