Quiz 6: Economic Growth, Business Cycles, and Unemployment

Business

Modern economists assume that people are purposeful in their behavior. Purposeful behavior means that people behave according to their interest. Habits and interests are determined the behavior of people.In rationality, people follow the rules of thumb, whereas in purposeful behavior, people act intentionally rather than rationality. Modern economists assume that people act according to their habits that reduce the cost of deciding the preference of goods and services. Intentional behavior of people is assumed, while formulating a model by modern economists.

The question is regarding how might a modeling itself outline an economist's analysis, making the economist not capable to see reality about the way in which society conquer women. Given various models itself explains that economist unable to see basic truths about the way in which society bring under control women. We can explain it with various examples. Sometimes for any job women get less salary than men. Promotion is given to the men rather than women. It has been seen that from many years women are underestimated by the society. As this way the models are not able to see the truth about the way in which society bring under control of women.

A model is a systematic representation of the observed situation. The model is basically based on the observed situation and empirical data. It only provides the framework regarding the issues. A model represents different things from reality. A model is based on available information, but it is not possible to include substantial information. Sometimes, observed information also differs from the reality that is presented in a model. Hence, a model differs from reality. For example, a collusive oligopoly model states that producers make decisions regarding price and quantity determination through a formal agreement, but in reality, such agreements do not exist.