When Economists Use Models to Make Predictions,faulty Assumptions Can Have

question 97

Essay

When economists use models to make predictions,faulty assumptions can have disastrous consequences.Why is "avoid making assumptions" not the solution to this problem? Use the concepts of endogenous and exogenous factors to explain.

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Definitions:

Homicide

is the act of killing another human being, whether lawfully or unlawfully.

Social Classes

Categories of people within society distinguished by relative levels of power, wealth, or status.

Homicide Rates

The frequency or number of homicides (intentional killings of one person by another) within a specified geographic area over a defined period of time.

Industrialized Countries

Industrialized countries are nations characterized by a significant level of industrial activity, technological advancement, and higher living standards.