Economic Models Are Used to

question 38

Multiple Choice

Economic models are used to

• A) explain every detail of an economic theory.
• B) explore decision making by individuals, firms and other organizations.
• C) build physical renditions of government construction projects.
• D) represent the complexities of economic environments.

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Definitions:

Compounded Annually

Interest added to the principal sum of a deposit or loan once per year, resulting in interest on interest.

Outstanding Balance

The total amount owed on a debt, excluding interest, that remains unpaid.

Compounded Monthly

A method where interest is calculated and added to the principal balance monthly, leading to exponential growth.

Compounded Monthly

Interest on an investment is calculated and added to the principal every month, increasing the amount of future interest earned.