Which of the following statements about economic models is TRUE?
A. The best economic models must be most complex.
B. Economic models are designed to explain what people need.
C. Every model is based on a set of assumptions.
D. A good model does not rely on any assumptions.
Answer: C
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If a curve falls and then rises, it shows
A) a maximum. B) a minimum. C) a linear relationship D) a constant slope relationship
The situation in which investors choose to put their funds in a safe asset during uncertain times is known as
A) hedging. B) speculation. C) flight to quality. D) arbitrage.
All industrialized countries have become "service economies" in recent decades. Explain the reasons behind this shift
Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis
A) increases. B) is infinite. C) decreases. D) is 0. E) is constant.