When Building a Model, an Economist Must

question 67

Multiple Choice

When building a model, an economist must:

• A) adjust for exceptional situations.
• B) provide a complete description of reality.
• C) make simplifying assumptions.
• D) develop a set of behavioral equations.

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Definitions:

Discretionary Fiscal Policy

Government policy involving deliberate measures, such as taxation and spending, to influence economic activity.

Economic Forecasts

Predictions about future economic activity based on current and historical data analysis, including trends in GDP, inflation, and employment.

Budget Document

A detailed financial statement presented by the government outlining its revenue and expenditure for a specific fiscal period.

Continuing Resolutions

Temporary funding measures used by governments to prevent operational shutdowns when formal budget bills have not been approved.