A constraint to complicated macroeconomic models has been:
A) an insufficient understanding of statistics.
B) that economists have run out of ideas.
C) that firms do not maximize profits.
D) that the models are complicated and challenging to solve.
E) that agents are not rational.

Question

Quizplus · Accepted Answer

Complicated macroeconomic models can be challenging to solve, both mathematically and computationally, which has been a constraint to their development and use. However, this does not mean that economists have run out of ideas or that agents are not rational, as there are ongoing developments in macroeconomic theory and empirical research. The assumption that firms maximize profits is also a common feature of macroeconomic models. While it is true that an insufficient understanding of statistics could be a constraint, it is not specific to macroeconomic models and is not the best choice here.

A Constraint to Complicated Macroeconomic Models Has Been