Question

One reason that economists make assumptions when designing models is to Question 10 options:

exclude variables that do not add predictive power to the model.
make models more like the real world.
make models more complex.
increase endogenous factors.
ensure that all possible factors are included.

Answer 1

The correct answer is letter "B": make models more like the real world.

Step-by-step explanation:

Economic models are created to represent real-world phenomena through simplified concepts. These models portrait complex events to identify when they can occur or to have a better understanding of why the take place. Some economic models are merely theoretical while some others are mathematical.