Which Is NOT True About the Use of Economic Models

question 251

Multiple Choice

Which is NOT true about the use of economic models?

• A) Economic models are simplified representations of the real world.
• B) Economists sometimes use laboratory experiments to test their theories.
• C) Economists use what has already happened in the real world to test their theories.
• D) Economists are employed to explain economic phenomena but are never used to predict what might happen next.

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Definitions:

Foreign Exchange Market

A global decentralized or over-the-counter market for trading currencies, determining exchange rates for every currency.

U.S. Dollar

The United States' official money, commonly utilized worldwide as a standard and reserve currency.

Depreciates

Describes how an asset loses value over time due to wear and tear, age, or obsolescence.

Current Account Transactions

Economic activities that affect a nation's balance of payments, including trade in goods and services, earnings on investments, and transfer payments.