Question

An economic model can be defined as___________a. a testable claim which can be evaluated with proper data.b. a representation of a theory or a part of a theory.c. another word for theory.d. a method to distinguish correlation from causation.e. All of the above are correct.

Answer 1

b. a representation of a theory or a part of a theory

Step-by-step explanation:

A model is different from theory because is a more applied and empirical representation of a situation while the theory is more abstract. An economic model is a simplified prediction of a complex and real economic behavior, it uses variables to analyze different scenarios, it also uses logical and quantitative relationships between economic processes, is usually mathematical. The results of these models can lead to a new investigation, theorization or to prove theories.

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