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
MANKIW: PRINCIPLES OF MICROECONOMICS
- What is economics? A social science that teaches one how to cope with scarcity. A discipline that quantifies the values of assets. A quantitative science to analyze business cycles. A science that teaches firms and individuals how to maximize profits.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_forwardEconomics is the study of all of the following except:a. how the prices of goods and services are determinedb. how people make decisions, given scarce resourcesc. how to eliminate scarcity with new ideas and inventionsd. how buyers and sellers interact in a marketPlease don't use any ai tool.arrow_forward
- Normative economics is: a. An investigation or statement about the norms and culture of other countries. b. An investigation or statement that attempts to describe how the world should be or ought to be. c. An investigation or statement about the positive benefits of a given country.arrow_forwardcreate 2 ideas if you were creating a topic idea based off of the information below It must be a MACRO topic economics theory is applied. a thorough understanding of particular economic concepts/theories; that you can apply those concepts/theories to analyze daily events.arrow_forwardPositive economics is: a. An investigation or statement that attempts to examine or understand how the world actually operates or how the world is operating. b. An investigation or statement about the norms and culture of other countries. c. An investigation or statement that attempts to describe how the world should be or ought to be. d. An investigation or statement about the positive benefits of a given country.arrow_forward
- Question 5 for a, b and c. Macroeconomics.arrow_forwardWho are the forerunners and father of Economics. Explain and discuss their contribution in the field of economics.arrow_forwardWhy do economists use models? to learn how the economy works to attract the attention of government officials to make economics accessible to the public to make sure that all of the details of the economy are included in their analysis Next Page Page 20 of 21arrow_forward
- Choose a simple economic term and explain it.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_forward1. Classify the following topics as relating to microeconomics or macroeconomics. a. A family’s decision about how much income to save b. The effect of government regulations on auto emissions c. The impact of higher national saving on economic growth d. A firm’s decision about how many workers to hire e. The relationship between the inflation rate and changes in the quantity of money 2. Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run trade-off between inflation and unemployment. b. A reduction in the rate of money growth will reduce the rate of inflation. c. The Federal Reserve should reduce the rate of money growth. d. Society ought to require welfare recipients to look for jobs. e. Lower tax rates encourage more work and more savingarrow_forward
- Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningEssentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author: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 LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co