Economic models:
A)are of limited use because they cannot be tested empirically
B)are limited to variables that are directly related to one another
C)emphasize basic economic relationships by abstracting from the complexities of the real world
D)are unrealistic and are, therefore, of no practical consequence
E)are often illogical, but are sometimes useful

Question

Quizplus · Accepted Answer

Economic models simplify the real world in order to highlight basic economic relationships. This abstraction from real-world complexities allows for a clearer understanding of economic principles and can help guide policy decisions. While economic models may not perfectly reflect reality, they can still be useful in making predictions and informing decision-making.

Economic Models