Which of the Following Is the Most Accurate Statement About

question 18

Multiple Choice

Which of the following is the most accurate statement about economic models?

• A) economic models attempt to mirror reality as closely as possible
• B) economic models are useful, but should not be used for policymaking
• C) economic models cannot be used in the real world because they omit details
• D) economic models omit many details to allow us to see what is important

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Definitions:

Monthly Rent

The periodic payment made by a tenant to a landlord for the use of premises.

Sunk Costs

Expenses that have already been incurred and cannot be recovered, and thus should not affect future decisions.

Accounting Methods

refer to the systematic techniques used to record, summarize, and report financial transactions of a business.

Variable Costs

Costs that change in proportion to the level of goods or services produced or sold.