One reason that economists make assumptions when designing models is to:
A) exclude variables that do not add predictive power to the model.
B) make models more like the real world.
C) make models more complex.
D) increase internal factors.
E) ensure that all possible factors are included.

Question

Quizplus · Accepted Answer

Assumptions help economists exclude variables that do not add predictive power to the model, thereby making the model more focused and accurate in its predictions. This also helps simplify the model and makes it easier for policymakers to use.

One Reason That Economists Make Assumptions When Designing Models Is