Economists use different models of the economy because the economy behaves differently
depending on how much time has passed after a demand shock.

Question

Quizplus · Accepted Answer

Different models of the economy take into account the different behaviors and effects on the economy after a demand shock depending on how much time has passed. For example, short-run models may focus on immediate reactions to the shock, while long-run models may consider the effects on factors such as productivity and technology over time.

Economists Use Different Models of the Economy Because the Economy