If an economic model includes an assumption that there are only two nations in the world,this would be an example of
A) a critical assumption
B) an implicit assumption
C) a simplifying assumption
D) a concrete assumption
E) a detail assumption

Question

Quizplus · Accepted Answer

Assuming there are only two nations in the world is an example of a simplifying assumption because it reduces the complexity of the economic model by limiting the number of variables that need to be considered.

If an Economic Model Includes an Assumption That There Are