When Evaluating the Usefulness of an Economic Model,one Should Check

question 52

Multiple Choice

When evaluating the usefulness of an economic model,one should check to see whether the model

• A) is consistent with models in other social sciences.
• B) is based on assumptions that are all close replicas of reality.
• C) is intelligible to the average layperson.
• D) predicts more accurately than any other model.
• E) can be tested under carefully controlled conditions.

---

Definitions:

Short Run

A period in economics during which some factors of production are fixed, limiting the ability of the economy or a firm to adjust to changes.

Real GDP

The market value of all final goods and services produced within a country in a given period, adjusted for inflation.

Recessions

Phases of momentary economic slump that lead to a reduction in trading and industrial activities, frequently identified by declining GDP in two successive quarters.

Aggregate Demand

The total demand for all goods and services in an economy at a given general price level and in a given time period.