Economists Build Models That Abstract from the Complexities of Reality

question 41

Multiple Choice

Economists build models that abstract from the complexities of reality because

• A)economists do not understand the real world.
• B)economists are not interested in reality.
• C)it is easier to do so.
• D)the complexities of reality are unimportant.
• E)they believe they gain a greater understanding of reality.

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Definitions:

Privately Held

Describes a business that is owned by private investors, employees, or company founders and not traded publicly on stock exchanges.

Artificial Being

A legal entity, not a natural person, created by law and recognized as having rights and duties.

Corporation

A corporation is a legal entity separate from its owners, offering limited liability protection, and has the ability to raise capital through the issuance of shares.

Business Organization

The structure and form that a business takes to conduct operations, ranging from sole proprietorships to corporations.