The definition of an economic model.
Answer to Problem 1CQQ
Option “c” is correct.
Explanation of Solution
Option (c):
The economic model can be defined as the simplified representation of some aspects of an economy or a simplified framework of a real, complex world. The economist uses the models for the generation of different economic ideas, new concepts, formulation of new principles, solving the questions in the economy,
Option (a):
An economic model is not a mechanical machine that replicates the functioning of the economy but is just model of a real situation of economy that is made by an economist. Thus, option “a” is incorrect.
Option (b):
An economic model is not a fully-detailed, realistic description of the economy, as it is a representation of a real, complex situation. But, it can’t describe the reality precisely. Thus, option “b” is incorrect.
Option (d):
A model is not a computer program for predicting the future of the economy. It is a small, simplified version of different economic aspects. Thus, option “d” is incorrect.
Concept introduction:
Economic model: Economic models are the simplified versions of reality used to analyze real-world economic situation and issues.
Want to see more full solutions like this?
Chapter 2 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
- A normative statement reflects opinions or beliefs, while a positive statement...arrow_forwardMacroeconomics is the study of a. the behavior of large firms in the marketplace b. the economic behavior of individual decision makers c. the behavior of the economy as a whole d. how to use the fewest natural resources to produce goods and servicesarrow_forwardWhat is important of studying economics? Give two good examples how the knowledge can help you in your daily routines.arrow_forward
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning