Which of the following sequences best describes the five necessary steps to develop an economic model in the correct order?
A)(1): Identify the endogenous variables;(2): identify the exogenous variables;(3): develop a model;(4): compare the model with the data;(5): conduct prediction and policy analysis.
B)(1): Develop a model;(2): identify the exogenous variables;(3): identify the endogenous variables;(4): compare the model with the data;(5): conduct prediction and policy analysis.
C)(1): Conduct prediction and policy analysis;(2): develop a model;(3): identify the endogenous variables;(4): identify the exogenous variables;(5): compare the model with the data.
D)(1): Conduct prediction and policy analysis;(2): compare the model with the data;(3):identify the endogenous variables;(4): identify the exogenous variables;(5): develop a model.
E)none of the above

Question

Quizplus · Accepted Answer

The correct sequence for developing an economic model starts with identifying the variables (endogenous then exogenous), developing the model, comparing it with real-world data, and finally conducting prediction and policy analysis.

Which of the Following Sequences Best Describes the Five Necessary