Suppose two economic models give the same predictions --- but one is simplistic and unrealistic in its assumptions while the other is rich in detail and resembles the real world more closely. If the sole goal of the economist is to predict, then the economist should use the simple and unrealistic model.
Answer the following statement true (T) or false (F)
True
Rationale: If two models predict equally well, then it makes more sense to use the simple model that's easy to use, even if the assumptions are unrealistic.
Economics
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When the labor market is at full employment
A) real GDP equals potential GDP. B) the price level is stable. C) the price level equals the potential price level. D) the short run aggregate supply curve is horizontal.
Economics
An increase in the size of the working-age population:
A. increases labor demand. B. increases labor supply. C. decreases labor supply. D. decreases labor demand.
Economics