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Why Must All Economic Models Involve Simplifications

Question 1

Multiple Choice

Why must all economic models involve simplifications?  


A)  because economic models are generally mathematically based 
B)  because human behaviour is very erratic and unpredictable 
C)  because reality is too complex to understand in its entirety, so it must be reduced to a level that can be understood 
D)  because economic models always try to duplicate all possible information and cover all possible variables that might influence decision making

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