The Scientific Purpose of Simplifying Assumptions in an Economic Model

question 60

Multiple Choice

The scientific purpose of simplifying assumptions in an economic model is to

• A)avoid confronting difficult issues.
• B)eliminate the need for further testing of the implications of the model.
• C)abstract from the complexities of the real world those issues that are not important for the issues under examination.
• D)eliminate the possibility of personal bias in the model.
• E)add necessary hypotheses to the problem.

Apply the concept of present value in determining the amount of periodic payments or contributions.

Use financial formulas to calculate the amount of interest paid over the life of a loan.

Plan financial goals such as saving for education, purchasing a home, or preparing for retirement by calculating necessary contributions.

Understand the factors affecting the accumulation and depletion of savings and investments over time.

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Definitions:

Social Theories

Intellectual frameworks that seek to understand, examine, and explain social phenomena, including patterns of social relationships, interaction, and culture.

Power

The potential or capability to affect the conduct of others or the progression of situations.

Patriarchy

A system where men control the political and economic resources of society. A pervasive and complex social and cultural system of male domination.

Anthony Giddens

A prominent British sociologist known for his theory of structuration and his holistic view of modern societies.