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An economic theory is often used to explain observed economic facts and is also called a __________.
model
A model consists of two parts: assumptions and __________.
predictions
The statement 'if price is cut, people will buy more of it' is an example of the __________ of Demand.
Law
In reality, the world has too many details and too much __________ to fully capture.
information
The phrase __________ means 'other things being held constant.'
Ceteris Paribus
Simplifying assumptions in economic models are necessary because the real world is too __________.
complex
Some criticisms of economic models include that they are __________ or that their assumptions are unrealistic.
oversimplified
According to Milton Friedman, to be important, a hypothesis must be __________ in its assumptions.
descriptively false
When policymakers consider a policy change, they must isolate the relationship between that change and the __________.
outcomes
The __________ assumption may not always be true, as efficiency may decline with longer working hours.
Ceteris Paribus
