An Economic Model Is

question 8

Multiple Choice

An economic model is

• A)a description of some aspect of the economic world that includes only those features of the world that are needed for the purpose at hand.
• B)a statement that describes how the world should be.
• C)a collection of facts that describe the real world.
• D)a generalisation that summarises all the normative assumptions we make about a particular issue.

---

Definitions:

Total Revenues

The total amount of income generated by a business from its sales of goods or services before any expenses are subtracted.

Capital Account

An account showing the net worth of a business at a specific point, accounting for assets minus liabilities.

Statement of Owner's Equity

A financial document that summarizes the changes in the equity of a company over a period, including investments, withdrawals, and the net income or loss.

Income Statement

A financial report summarizing the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.