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Macroeconomics Study Set 48
Quiz 2: Economic Models: Trade-Offs and Trade
Because Models Make Simplifying Assumptions, They Are of Very Little
Question 249
True False
Because models make simplifying assumptions, they are of very little use in the real world.
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Q 250
An economic model is a simplified version of reality that is used to analyze real-world economic situations.
Q 251
The financial meltdown in 2008-2009 was partially the result of a faulty economic model that misestimated the value of mortgage-backed securities.
Q 252
The value of a mortgage-backed security is tied to the interest on the national debt paid by the Federal Reserve.
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