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12 January, 05:17

One reason that economists make assumptions when designing models is to:

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  1. 12 January, 06:36
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    One reason that economists make assumptions when designing models is to " exclude variables that do not add predictive power to the model".

    Economists models are based on a series of assumptions, including that individual performers have consummate data about their decisions or that subjective human esteems can be estimated quantitatively. A few models even accept away competition, substitute merchandise and promoting.

    Economists create these assumptions, keeping in mind the end goal to apply testable speculations onto a generally deductive sociology. Without presumptions, quantitative financial models would not have the capacity to deliver any important results.
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