Economic models
A)are always based on realistic assumptions.
B)usually predict perfectly.
C)can never be tested with real-world data.
D)are used to describe cause-and-effect relationships.
E)are too simple to be of much use.

Question

Quizplus · Accepted Answer

Economic models are used to describe cause-and-effect relationships between different economic variables. While they may not always be perfectly accurate, they are designed to provide insight into the relationships between economic variables and their potential impacts. Realistic assumptions are often used, but they do not always predict perfectly, and they can be tested with real-world data. While some models may be overly simplified, many are complex enough to be useful in guiding economic policy and decision making.

Economic Models