Which statement is a characteristic of economic models?
A) Models try to boil down an economic situation to its most basic elements.
B) Models are always complex because the economy is complex.
C) Models attempt to reproduce reality exactly.
D) Models try to avoid invoking the ceteris paribus assumption.

Question

Quizplus · Accepted Answer

Economic models aim to simplify complex economic situations by breaking them down into basic elements. This is necessary in order to make predictions and analyze the effects of different variables on the economy. Models are not always exact representations of reality and often use the ceteris paribus assumption to isolate the effects of a single variable.

Which Statement Is a Characteristic of Economic Models