Economists Use Abstract Models Because

question 57

Multiple Choice

Economists use abstract models because:

• A)every economic situation is unique, so it is impossible to make generalizations.
• B)every economic situation is essentially the same, so specific details are unnecessary.
• C)they are useful for describing general patterns of behavior.
• D)computers have allowed economists to develop abstract models.

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Definitions:

No Par Common Stock

is common stock that has been issued without a par value, meaning its value is not fixed in the company’s charter but is determined by the market.

Cash Price

The amount of money that a buyer must pay to purchase a good or service immediately without financing.

Paid-In Capital

Funds that a company raises by issuing shares of stock, representing the amount shareholders contribute in exchange for stock.

Treasury Stock

Shares that were issued and later reacquired by the issuing corporation, not considered when calculating dividends or earnings per share.