An economic model is:
A) a value judgment.
B) a fact.
C) built using theory.
D) built on policies.

Question

Quizplus · Accepted Answer

An economic model is built using theory. It is a simplified representation of the real world that helps to understand and analyze economic phenomena. While models are based on assumptions and simplifications, they are useful in testing theories and predicting the impact of changes in different economic variables. Economic policies may be informed by economic models, but the models themselves are not built on policies. A value judgment is an opinion, not a model or fact.

An Economic Model Is