A Model or Theory in Economics Is

question 136

Multiple Choice

A model or theory in economics is:

• A) based mostly on value judgments.
• B) built using relevant observations, assumptions, and abstractions.
• C) only useful if it correctly portrays the real world and its complexities.
• D) useful only if it is based on normative economic statements.

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Definitions:

Total

Referring to the complete amount or sum of parts.

Relative Frequency

In statistics, relative frequency refers to the ratio of the number of times a particular event occurs to the total number of events observed.

Lemonade Stand

A small, often temporary stand or business where lemonade is sold, typically run by children or as a simple small-scale business model.

Legislation

Laws that have been enacted by a governing body or the process of making or enacting laws.