A critical assumption
A) makes an economic model a more concrete representation of reality
B) eliminates unnecessary details from an economic model
C) has an important impact on the conclusions of an economic model
D) is usually implicit in an economic model
E) increases the level of abstraction of an economic model

Question

Quizplus · Accepted Answer

Critical assumptions are those assumptions that have a significant impact on the conclusions of an economic model. They can greatly affect the accuracy and applicability of the model's results. Thus, understanding and analyzing critical assumptions is essential for evaluating the usefulness and reliability of economic models.

A Critical Assumption