Why Do Economists Use Models

question 1

Multiple Choice

Why do economists use models?

• A) to learn how the economy works
• B) to attract the attention of government officials
• C) to make economics accessible to the public
• D) to make sure that all of the details of the economy are included in their analysis

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Definitions:

Projected ROEs

Estimated returns on equity, predicting future profitability based on company's equity investments.

Restricted Policy

A restricted policy typically involves limitations or controls set on certain actions or decisions within an organization, aiming to comply with regulations, reduce risk, or achieve specific goals.

Relaxed Policy

A financial strategy or policy that is less strict or rigid, often implying a more liberal approach to lending, investing, or managing assets.

Trade Credit

The arrangement between businesses to buy goods or services on account, paying the supplier at a later date.