To be valid, an economic model must
A) include every activity that occurs in the real world
B) include every economic activity that occurs in the real world
C) be useful in explaining cause-and-effect relationships in the real world
D) exclude any link to the real world
E) not be based on an abstraction of the real world

Question

Quizplus · Accepted Answer

Economic models are simplified representations of the real world and are considered valid if they can effectively explain cause-and-effect relationships, rather than needing to include every detail of real-world activities.

To Be Valid, an Economic Model Must