Question

When constructing models, economists:

make simplifying assumptions.

attempt to duplicate the real world.

include all available information.

must use mathematical equations.

Answer 1

Economic models are constructed by the economists to depict the real world economic situations in simple terms.

Real world economic situations are dynamic and keep on changing.

So, in order to present them in simple terms, economists tends to make some assumptions.

These assumptions pertains to certain factors that are kept constant so that relation between two variable can be depicted by the model in simple terms.

Thus,

It can be stated that when constructing models, economists make simplifying assumptions.

Hence, the correct answer is the option (1) [make simplifying assumptions].