Which of the following statements is true?
A) No economic model captures every detail that affects a problem.
B) Economic models always make accurate predictions about behaviors.
C) Economic models must fully reflect reality.
D) Economic models use economists' opinions with no use of data.

Question

Quizplus · Accepted Answer

Economic models are simplifications of reality and therefore never capture every detail that affects a problem. However, they can still be useful in guiding decision-making and understanding economic phenomena. Option B is incorrect because economic models make predictions based on assumptions that may not always hold. Option C is incorrect because economic models are simplified versions of reality, and trying to fully reflect reality would make the models too complex and difficult to use. Option D is incorrect because economic models are based on data and empirical evidence, not just economists' opinions.

Which of the Following Statements Is True