The Purpose of an Economic Model Is To

question 119

Multiple Choice

The purpose of an economic model is to:

• A) describe the way economists think the world should be.
• B) provide a simplified representation of a complicated situation.
• C) describe the best possible outcomes for society.
• D) explain a situation without making strong assumptions.

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Definitions:

Stock's

A stock represents a share in the ownership of a company, reflecting a claim on the company's assets and earnings.

Exchange-Listed

A security or financial instrument that is authorized for trading on an official securities exchange.

Capital Gains Yield

The rise in price of an investment or asset, expressed as a percentage of the investment's purchase price.

Appreciate

An increase in the value of an asset over time.