The importance of an economic model is that it allows us to:
A)build a complex and accurate model of the economy.
B)build an accurate mathematical model of the economy.
C)focus on the effects of only one change at a time.
D)avoid opportunity costs.

Question

Quizplus · Accepted Answer

Economic models allow us to isolate the effects of only one change at a time. By simplifying the complex interactions in the economy, we can focus on the specific impact of a particular policy or event, which can help policymakers make more informed decisions. While economic models may incorporate mathematics, their usefulness lies in their ability to highlight cause-and-effect relationships rather than their technical accuracy. Economic models cannot eliminate opportunity costs, as they are an inherent part of decision-making in any economic system.

The Importance of an Economic Model Is That It Allows