GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An economic model is a physical representation of an economy
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TRUE
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FALSE
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Answer and Explanation: The above statement is false.
Detailed explanation-2: -Most economic models rest on a number of assumptions that are not entirely realistic. For example, agents are often assumed to have perfect information, and markets are often assumed to clear without friction. Or, the model may omit issues that are important to the question being considered, such as externalities.
Detailed explanation-3: -The circular flow model is an economic model that shows the flow of money through the economy. The most common form of this model shows the circular flow of income between the household sector and the business sector. Between the two are the product market and the resource market.
There is 1 question to complete.