A simplifying assumption
A) affects the important conclusions of an economic model.
B) increases the level of detail in an economic model.
C) limits the validity of an economic model's conclusion.
D) eliminates unnecessary details from an economic model.

Question

Quizplus · Accepted Answer

Simplifying assumptions are used to eliminate unnecessary details from an economic model, making it easier to understand and analyze. While these assumptions may limit the overall validity of the model, they are necessary to reduce complexity and make the model more manageable. As such, simplifying assumptions do not necessarily affect important conclusions of an economic model, but rather help to make those conclusions more accessible.

A Simplifying Assumption