One Reason That Economists Make Assumptions When Designing Models Is

question 159

Multiple Choice

One reason that economists make assumptions when designing models is to

• A) exclude variables that do not add predictive power to the model.
• B) make models more like the real world.
• C) make models more complex.
• D) increase endogenous factors.
• E) ensure that all possible factors are included.

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Definitions:

Market Globalization

The process of integration and interaction among different national markets, leading to a global marketplace with diminished trade barriers.

Technological Innovation

The introduction of new technologies or the improvement of existing ones, leading to better products, services, or processes.

Government Purchases

Expenditures made by the government for goods and services that directly satisfy public consumption, investment, or need.

Federal Level

Pertaining to the national government of a country, as opposed to state, local, or municipal levels.