Question

How do economists use economic models

Answer 1

Answer:

Economists use economic models to study particular aspects of economic reality. To do so, they develop a simplified model of reality in which only a few variables are included, and everything else is held constant or ignored.

Explanation:

For example, the most famous economic model is the model of supply and demand, which is used to analyze how consumers and producers interact in the market for a good or service, and how this interaction determines the price.

As we can see, in this economic model of supply and demand, many other things like social class or history are left aside, and only a few variables are included.