Which of the following is necessary to build a good economic model?
A) normative statements
B) assumptions
C) opinions
D) complex math
E) realism

Question

Quizplus · Accepted Answer

Assumptions are necessary to build a good economic model as they are the basis for identifying cause-and-effect relationships between economic variables. Without assumptions, it would be impossible to create a coherent model that can help explain economic phenomena. While realistic assumptions are desirable, they are not necessary for a model to be useful or insightful. Normative statements and opinions have no place in economic models, as they concern value judgments rather than objective analysis. Complex math may be useful in some cases, but is not a necessary ingredient for building a good economic model.

Which of the Following Is Necessary to Build a Good