Which of the following correctly describes a deterministic economic model?
A) A deterministic model is a model for which the outcome is predicted with certainty.
B) A deterministic model can only be used to explain short-run economic phenomena.
C) A deterministic model is most useful in identifying long-term trends.
D) A deterministic model is used in the study of normative economics.
E) The outcome of a deterministic model is random and has probabilities attached.

Question

Quizplus · Accepted Answer

A deterministic economic model is one for which the outcome is predicted with certainty, based on a set of known parameters and initial conditions. It is not based on probabilities or randomness, but rather on a clear cause-and-effect relationship between variables.

Which of the Following Correctly Describes a Deterministic Economic Model