Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 1, Problem 4QQ
To determine
Identify which option is correct for an economic model.
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Why is it important for us to use models when studying economics?
All economic models are wrong. Yet, we study models in order to answer economic questions. Explain.
Economic Models?
a. are essential representations of the real world
b. are used to explain how people think
c. are never used for making economic projections or predictions
d. are used to explain how people behave
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- True/false/explain. Economic models must mirror reality or they are of no value. When economists make normative statements, they are more likely to be acting as scientists.arrow_forwardEconometric models have nothing to do with the reality." What say you?arrow_forwardTwo simplifying assumptions are used extensively in economics. What are they?arrow_forward
- Why do you think economic models are important in econometric?arrow_forwardExplain the term models or paradigms?arrow_forwardWhich statement is not true about the use of models in economics? 1. They are based on simplifying assumptions. 2. They are used to forecast economic variaables such as GDP growth. 3. They must closely mirror real life in order to be informative. 4. There are often multiple models that seek to explain the same economic phenomena. 5. They are usually represented graphicallyarrow_forward
- Which of the following is not correct about most economic models? A) They are composed of equations and diagrams. B) They contribute very little to economist's understanding. C) They omit many features of the real world economy. D) In constructing models, economists make assumptions.arrow_forwardAP Microeconomics. What assumptions does the model of intertemporal choice makes that are not likely true in the real world and would make the model harder to use in practice?arrow_forwardWhat is the best test of an economic theory? a. Whether it produces implications that are favored by the researcher. b. Its ability to predict real-world events, patterns, and changes. c. Its eloquence. d. The plausibility of its assumptions.arrow_forward
- Suppose, as an economist, you are ask to analyze an issue unlike anything you have ever done before. Also, you do not have a specific model for analyzing that issue. What should you do? Hint: what would a carpenter do in a similar situation?arrow_forwardMicroeconomics is a brach of economics that studies: a. The determination of national income b. The behaviour of individual decision-making units in the economy c. The effects and consequences of the aggregate behaviour of all decision-making units d. The impact of unemployment in South Africaarrow_forward
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