The level of detail in an economic model
A) is as close as possible to the level of detail in reality
B) depends on the purpose of the model
C) is as complex as possible
D) is the same regardless of the purpose of the model
E) is as complex as possible to accomplish its purpose

Question

Quizplus · Accepted Answer

The level of detail in an economic model depends on the purpose of the model. If the purpose is to provide a general understanding of the economy, the model may be less detailed. However, if the purpose is to make specific policy recommendations, the model may need to be more detailed and complex. Therefore, the level of detail in an economic model is not always as close as possible to the level of detail in reality or as complex as possible to accomplish its purpose.

The Level of Detail in an Economic Model