Economists build economic models by
A)generating data.
B)conducting controlled experiments in a lab.
C)making assumptions.
D)reviewing statistical forecasts.

Question

Quizplus · Accepted Answer

Economists build economic models by making assumptions. These assumptions are based on simplified versions of reality and help economists to understand how different economic variables interact with each other. Building an economic model involves choosing which variables to include, how to measure those variables, and how to mathematically express their relationships. While generating data and reviewing statistical forecasts may be used in the process, they are not the primary ways economists build models. Controlled experiments in a lab are also not commonly used in economics as they are in other sciences.

Economists Build Economic Models by