If an important assumption is omitted from an economic model,
A) the model's predictions will be accurate 50% of the time.
B) the model's predictions will be inaccurate.
C) the model will not predict anything.
D) the model will be rejected by other economists.

Question

Quizplus · Accepted Answer

Omitting important assumptions from an economic model can lead to inaccurate predictions since the model fails to account for important variables that affect the outcome being predicted. Hence, the best answer is B.

If an Important Assumption Is Omitted from an Economic Model