Question

Any model is based on making assumptions because A. models have to be simplified to be useful. B. we cannot analyze an economic issue unless we reduce its complexity. C. both a and b. D. neither a nor b.

Answer 1

Answer:

C). Both A and B.

Explanation:

A model is demonstrated as the rationalized and clarified form of reality that involves mere significant components by removing the less important aspects or details that would assist in reducing the complexity of the issue.

Any model is built upon forming assumptions as a complex economic issue could not be effectively observed or analyzed until its complexity is not neutralized or reduced and secondly, it is important to simplify the models to enhance its utility and functionality which is the chief aim of any model. Therefore, options A and B both are correct.