Which of the following best describes economic models?

Question

Quizplus · Accepted Answer

Economic models are simplifications of real-world economic situations that allow economists to understand and make predictions about how the economy works. While they may not capture every variable of the real world, they provide useful insights and allow for testing of economic theories. It is true that some economic models may be built on unrealistic assumptions, but this is not a defining characteristic of all economic models.

Which of the Following Best Describes Economic Models