Final answer:
The correct answer is D. The true statement about economic models is that they should make clear assumptions to simplify complex economic processes, rather than trying to accurately predict every cause and effect or include every possible detail.
Step-by-step explanation:
Economic models, such as those illustrating supply and demand curves, often use simplifying assumptions to demonstrate market equilibrium and show how prices stabilize under certain conditions. While these models can be quite useful in predicting outcomes and behavior, they are not perfect and can make erroneous predictions. The simplifications that models employ are designed to strip away the complexities of real-world scenarios, allowing for more straightforward analysis.
For example, an economist may assume that the only things you buy are economic books and music, simplifying an individual's complex budget into a few variables. This kind of economic model wouldn't include all the nuance of real-life spending but would still provide insights into general consumer behavior.
Therefore, to be useful, an economic model doesn't need to include all possible details—such an undertaking would be impractical and immensely complicated—nor should it avoid making any simplifications. Instead, the key is that an economic model's assumptions are clear and well-defined, enabling easier comprehension and application for analyzing economic phenomena.