Economic Models Are

question 36

Multiple Choice

Economic models are:

• A)set up and used to precisely mirror reality.
• B)useless if they are simple.
• C)made generally of wood,plastic,and/or metal.
• D)potentially useful in forming economic policy.

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Definitions:

Priority in Time

A legal principle that grants precedence to rights or claims established earlier in time over those established later.

Securitization

The process of converting assets, usually illiquid ones, into marketable securities, thereby enhancing liquidity and often reducing risk.

Mortgages

A legal agreement by which a bank or creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, which includes terms for variable or fixed interest payments and the return of the original investment at maturity.