Question

It is important for a good economic model to predict cause and effect so that it can: explain events that have occurred and help anticipate future events. be used to predict all future events. be used to change the direction of causality. fit the real world perfectly.

Answer 1

Answer: Explain events that have occurred and help anticipate future events.

Explanation:

A good Economic model should be able to explain a phenomenon as well as proffer solutions to it and help anticipate the future.

It is normally said that for one to know where they are going, they need to know where they have been.

Without an Economic theory that explains what has happened and what must be done, humanity will stumble from one bad decision to another when dealing with Economic problems.

Imagine if there were no models to like the Economic Lifecycle to predict or at least to offer solutions to times the Economy goes through a Depression. Or imagine if the Central Bank (FED) didn't know what to do to help the Economy. Or if the US government didn't know when to impose more taxes or less.

Economic models NEED to explain events and predict the future.

Answer 2

Answer:

Yes it is

Explanation:

Because Prediction of cause and effect is important for the good economic model. If the economic model observe the cause and effect relationship, then it can be helpful to anticipate from the similar situation in future. For example, recession is causes recession. If the economic model observe it, then it can be helpful to control recession if t occurs in future.