When Economists Use Models to Make Predictions,faulty Assumptions Can Have

question 97

Essay

When economists use models to make predictions,faulty assumptions can have disastrous consequences.Why is "avoid making assumptions" not the solution to this problem? Use the concepts of endogenous and exogenous factors to explain.

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Definitions:

Personal Property

Items of property that are not fixed to one location and can be moved, such as furniture, vehicles, and electronics.

Classification

The systematic arrangement into categories or groups based on shared characteristics or criteria.

Ascertainable Value

A clear and definite value that can be precisely identified or determined, often used in contexts involving contracts or financial transactions.

Ownership

The legal right or title to an asset or property, granting the owner control and benefits from its use or disposition.