In constructing models, economists
A)include all independent variables.
B)include all available information.
C)attempt to duplicate the real world.
D)make simplifying assumptions.

Question

Quizplus · Accepted Answer

Economists make simplifying assumptions in constructing models as it is impossible to include all variables and information in a model. These simplifying assumptions help in isolating the relationship between a few key variables and understanding their impact on the outcome.

In Constructing Models, Economists