A useful economic model
A) utilizes only the two most important factors to analyze the problem under consideration.
B) generates statements that are incapable of refutation.
C) represents every detail of the real world.
D) yields usable predictions and implications for the real world.

Question

Quizplus · Accepted Answer

A useful economic model should be able to generate predictions and implications that can be applied in the real world. A model that only utilizes two factors may be oversimplified and may not be capable of producing practical results. A model that represents every detail of the real world may be too complex and difficult to apply. A model that generates statements that cannot be refuted is not useful in practice, as it does not allow for testing and improvement.

A Useful Economic Model