The purpose of making assumptions in an economic model is to
A) force the model to yield the correct answer.
B) minimize the amount of work an economist must do.
C) simplify the model while keeping important details.
D) express the relationship mathematically.

Question

Quizplus · Accepted Answer

Assumptions are made in economic models to simplify the model while keeping important details. This helps to make the model more manageable and easier to analyze. The assumptions made in a model should be reasonable and reflect the reality of the economic situation being studied.

The Purpose of Making Assumptions in an Economic Model Is