Consider how an economic model can be viewed as a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested. In essence, a simulation. Hence, one important element of an economic model is that it is necessarily subjective in design because there are no objective measures of economic outcomes. If different economists make different judgments about what is needed, how can we tell if a model is ‘useful’? What does this tell us about economic behavior?
The federal government utilizes a range of fiscal policy instruments to control economic volatility, including inflation and recessions. Inflation is
The federal government utilizes a range of fiscal policy instruments to control economic volatility, including inflation and recessions. Inflation is defined as growing prices and a decline in buying power. In contrast, recessions are marked by a decline in economic activity, a fall in consumer expenditure, and a rise in




