explain why models are used in economics?

Question

and outline the correct interpretation of economicmodels

Answer 1

What else is there to use? Experimentation is rarely possible, while non-quantitative discourse is rarely useful...

Answer 2

A model is an interpretation or simplification on reality. Economist use models to GAIN INSIGHT into key concepts or theories. Models do not have to truly duplicate reality to be useful. Think of a model aircraft, we all know it is not the real thing, but by looking at it in it's simplest form: we can gain insight into how it looks and what it's mission might be. Economic models do the same thing, they allow us to see how variable relate or how things work without considering all available information and details. Reality is too complex!

Answer 3

economics is answering questions about numbers
"How will inflation change if fed decreases it's rate by 0.25%?"
"How many more cars can Ford sell if they decrease price by 3%?"

To get a number, you need a formula. To get this formula, you need to write other formulas that describe the market or economy you're interested in. These formulas are called a model.

These models have their limits, and it is important to know these when interpreting their results. Models are designed to describe a specific aspect of economy at a specific period in time, so you have to be careful applying them outside this scope.

Answer 4

The above answer is quite ludicrous...

As economists we model situations that are complex so that we can analyse more simple aspects of it and therefore devise certain policy impliations to improve economic situations. We analyse models using econometrics.

Answer 5

probably because the dresses and other clothing items they display are so expensive and the companies that sponser them stand to gain millions of dollars in revenue! this is why the models are paid the outrageous amounts of money they are! the modeling industry is in the billions worldwide!