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Reptile [31]
4 years ago
10

How do economists use economic models

Business
1 answer:
kirill [66]4 years ago
6 0

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.

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There are two points that I would like to single out that are very similar. First by implementing tax and gift taxes, Founding Father wanted to weaken families and business of that time, since there was a threat that rich families could become permanent aristocracy which over time could lead to the point where that families will rule the US. Second, by implementing those two taxes, government is taking a share from receivers since the receivers are getting some good that they did not earn it, they have just received it as a gift or as an estate. This way inheritance or gift would be of a much lesser value then it was before someone’s death or before someone made a gift. This was important because wealth of powerful families would just accumulate and grow so government of that time, strictly out of political reasons, prescribed those two taxes, so that the wealth will be smaller of value after tax.

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A mixed economy has three of the followingcharacteristics of a market economy.

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On a large construction project, the price of dry wall is $.40 per square foot and spraying the dry wall with textured plaster i
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3 years ago
Suppose that during the most recent fiscal year, the an- nual revenue of Acme Computer was 138 billion dollars and its net profi
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a) False

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