What Do Economists Always Do When They Are Constructing Theories

question 56

Multiple Choice

What do economists always do when they are constructing theories or models?

• A)They make simplifying assumptions.
• B)They attempt to duplicate the real world.
• C)They ensure that the theory can be expressed mathematically.
• D)They try to include as much information as possible.

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Definitions:

Banking

The business conducted or services offered by a bank, including deposits, loans, and currency exchange.

Interest Rate

The ratio of a loan that represents interest expenses to the borrower, typically articulated as an annual percentage of the loan yet to be repaid.

Selling Price

The price at which an item or service is sold to buyers.

Face Value

The nominal or stated value of a security or coin, as printed or stamped on the face of it, and not necessarily its market value.