An economic model is useful only if it:

Question

Quizplus · Accepted Answer

The usefulness of an economic model lies in its ability to yield accurate predictions with policy implications. The primary purpose of economic models is to inform policy decisions through predictions about the expected outcomes of particular policy interventions. While models represent an abstraction of reality and cannot capture all complexities, they can still be useful if they provide reliable predictions under specific assumptions. Positive and normative statements are not necessary for an economic model to be useful.

An Economic Model Is Useful Only If It