When Building a Model, Economists

question 108

Multiple Choice

When building a model, economists:

• A)simplify reality in order to highlight what really matters.
• B)attempt to duplicate reality in all of its complexity.
• C)ignore the facts and instead try to determine what the facts should
• D)be.are careful to avoid the scientific method.

Analyze the impact of minimum wage laws on employment and wages.

Comprehend the relationship between wages, productivity, and economic forces.

Recognize the factors determining the demand for labor and the concept of marginal revenue product.

Identify the effects of income and substitution effects on labor supply and demand.

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Definitions:

Statement

A formal record that summarizes financial activities or conditions, such as an income statement, balance sheet, or cash flow statement.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity.

Disclosures

The act of making new or secret information known, typically in a formal report.

Financial Accounting Standards Board (FASB)

The private sector body given the primary responsibility to work out the detailed rules that become generally accepted accounting principles.