Economic models are
A) always based on laboratory methods similar to natural sciences.
B) a simplified representations of the real world.
C) used only in conducting experiments about how people behave.
D) used in macroeconomic analysis but not in microeconomic analysis.

Question

Quizplus · Accepted Answer

Economic models are simplified representations of the real world. They are used in both macroeconomic and microeconomic analysis to help understand complex economic systems and make predictions about how they may behave under certain conditions. They are often based on assumptions and may be tested using both theoretical and empirical methods, but they are not always based on laboratory experiments as natural sciences are.

Economic Models Are