An Economic Model Is a

question 45

Multiple Choice

An economic model is a

• A) realistic version of an economic environment.
• B) detailed version of an economic issue.
• C) fictional representation of an entire economy.
• D) simplified representation of an economic environment.

---

Definitions:

Excess Capacity Scenario

A situation where a company can produce more goods or services than currently demanded because of available resources exceeding production requirements.

Sales Increase

The rise in the amount of goods or services sold by a company within a specific period.

Capacity Level

The maximum output or production level that a facility, plant, or business can achieve under normal operations.

Net Working Capital Turnover

A ratio used to measure how effectively a company is using its short-term assets and liabilities to generate revenue.