To Be Valid, an Economic Model Must

question 83

Multiple Choice

To be valid, an economic model must:

• A) include every activity which occurs in the real world.
• B) include at least 85 percent of the activity which occurs in the real world.
• C) be able to predict events occurring in the real world.
• D) exclude any link to the real world.
• E) not be based on an abstraction of the real world.

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Definitions:

World's Population

The total number of people living on Earth at a given time, currently estimated to be over 7.9 billion.

Economic Growth

An increase in the production of goods and services over a specific period, leading to a rise in a country's standard of living.

Population Growth

The increase in the number of individuals in a population over a specific period of time.

Real Per Capita Output

The total real output of an economy divided by the population, measuring the average economic output per person in real terms, adjusted for inflation.