An Economic Model That Contains a Highly Realistic Set of Assumptions

question 105

Multiple Choice

An economic model that contains a highly realistic set of assumptions is

• A)useful because there is then very little difference between "theory" and "reality."
• B)necessarily better able to predict the future.
• C)certainly superior to a model whose assumptions are highly unrealistic.
• D)more abstract than a model whose assumptions are further removed from reality.
• E)not likely to be useful because of its particularized nature and its complexity.

---

Definitions:

Diffuse

Spread out over a large area; not concentrated or focused.

Procedural Fairness

Refers to the perceived fairness of the processes used to make decisions within organizations.

Distributive Fairness

The perceived fairness of the outcomes received, including resources and rewards, within an organization or social system.

Emotional Contagion

The phenomenon where emotions and behaviors can be transferred from one person to another, often unconsciously, leading to shared feelings or mimics in groups.