Economic Models

question 7

Multiple Choice

Economic models:

• A)are of limited use because they cannot be tested empirically
• B)are limited to variables that are directly related to one another
• C)emphasize basic economic relationships by abstracting from the complexities of the real world
• D)are unrealistic and are, therefore, of no practical consequence
• E)are often illogical, but are sometimes useful

---

Definitions:

Audit

An official inspection of an individual's or organization's accounts, typically by an independent body, to ensure accuracy and compliance with laws and regulations.

Contract

A legally binding agreement between two or more parties that defines and governs the rights and duties of the parties involved.

Substantially Performs

A legal concept that refers to the completion of the essential terms of a contract, even if there are minor deviations.

Contractually Agreed-upon Fee

A fee that has been specifically negotiated and agreed upon within the terms of a contract.