Any economic model should be judged primarily on:
A)How realistic its assumptions are.
B)How accurately its predictions match observed behavior.
C)How easy the model is to use.
D)How many aspects of real-world behavior and choices are incorporated in the model.
E)How original the model is compared to other models.

Question

Quizplus · Accepted Answer

The primary goal of an economic model is to accurately predict real-world behavior. While realism and ease of use are important factors, the ultimate test of a model's usefulness is how well it can predict actual outcomes. The number of factors incorporated in the model and its originality are also important, but they are not as critical as accuracy in predicting behavior.

Any Economic Model Should Be Judged Primarily On