A Model or Theory in Economics Is

question 136

Multiple Choice

A model or theory in economics is:

• A) based mostly on value judgments.
• B) built using relevant observations, assumptions, and abstractions.
• C) only useful if it correctly portrays the real world and its complexities.
• D) useful only if it is based on normative economic statements.

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Definitions:

Short-Term Funding

Financial resources borrowed for a short period, typically less than a year, to cover immediate financial needs.

Leaning on the Trade

A strategy used by traders to manipulate prices by taking positions that influence other traders to move a market in a desired direction.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including repayment timelines and interest rates.

Prompt Payment Discount

A discount offered by sellers to buyers for paying their bills promptly, usually defined as within a specified number of days.