ch1t

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