Which of the Following Statements Is FALSE

question 91

Multiple Choice

Which of the following statements is FALSE?

• A) Economists empirically test their models.
• B) Economic models are not used to make predictions.
• C) An economic model should capture only the key relationships that are sufficient to analyze the particular problem being studied.
• D) Economic models relate to behavior rather than to individual thought processes.

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Definitions:

Real Variable

A variable, such as income or output, that has been adjusted for inflation, reflecting true purchasing power.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.

Net Exports

The value of a country's total exports minus the value of its total imports, representing a component of a nation's GDP.

Short Run

A period in which at least one input is fixed, limiting the ability of a firm to adjust all of its inputs to change output.