An economic model that contains a highly realistic set of assumptions is
A)useful because there is then very little difference between "theory" and "reality."
B)necessarily better able to predict the future.
C)certainly superior to a model whose assumptions are somewhat unrealistic.
D)more abstract than a model whose assumptions are further removed from reality.
E)not likely to be useful because of its particularized nature and its complexity.

Question

Quizplus · Accepted Answer

Economic models with highly realistic sets of assumptions often become too complex and particularized, making them less useful for general application or understanding broad economic principles. Simplified models, despite having unrealistic assumptions, can be more effective in explaining general concepts and trends.

An Economic Model That Contains a Highly Realistic Set of Assumptions