Economists Use Models To

question 56

Multiple Choice

Economists use models to:

• A) abstract from the complexities of the world.
• B) understand economic behavior.
• C) explain and help predict human behavior.
• D) do all of the above.

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Definitions:

Inflation Expectations

The rate at which people expect the general price level of goods and services to rise in the future.

Housing and Financial Crisis

A period marked by severe disruptions in the availability of credit, widespread foreclosures, and plummeting housing prices, typically leading to a long-term economic downturn.

World Prices

The prices of goods and services as determined on the global market, influenced by global supply and demand.

Inflation Rate

The velocity with which the average cost figures for goods and services ramp up, undercutting the efficiency of consumer expenditure.