Economic Models Are Only Useful in Analyzing Government Policy

question 42

Multiple Choice

Economic models are only useful in analyzing government policy.

• A) True, individuals are irrational and therefore economic models are useless.
• B) False, economic models can be used to predict individual and firm behavior.
• C) True, economists only model those questions for which they are hired.
• D) False, economic models are not even useful in analyzing government policy.

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Definitions:

Poverty Threshold

The minimum level of income deemed adequate in a specific country to maintain a certain standard of living.

Family of Four

A household unit consisting of four members, typically two adults and two children, often used for statistical or planning purposes.

Money Income

The total amount of monetary earnings or receipts acquired by an individual or household over a certain period.

Classifying People

The organizing of individuals into groups based on shared characteristics or criteria, which can range from demographic factors to skill sets.