Modern macroeconomic models: a) tend to be theoretically rigorous

Economics Dec 14, 2020

Modern macroeconomic models:

a) tend to be theoretically rigorous.

b) are usually internally consistent.

c) all of the answers in this question.

d) are extremely complex.

e) sometimes produce unrealistic outcomes that defy human behavior.

Expert Solution

The correct answer is b) are usually internally consistent.

Modern macroeconomic models are based on simple theories and are easy to follow due to their consistency, which explains why options A and D are wrong. Also, due to their internal consistency, there are no unrealistic outcomes if these models are prepared properly.

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