Which one of the following statements with regard to economic models is not correct?

• (A) They involve simplification of complex processes
• (B) They represent the whole or a part of a theory
• (C) They can be expressed only through equations
• (D) They help in gaining an insight into cause and effect

Economic models are simplified representations of reality that highlight essential features of an economic system by omitting minute details [3]. They serve as logical templates to organize thoughts and represent either the whole or a specific part of an economic theory [1]. These models are crucial for gaining insights into cause-and-effect relationships between interacting elements, such as the impact of policy changes or consumer behavior [4]. While many models utilize mathematical equations to describe behavior [1], they are not expressed only through equations. Economic models can also be presented as visual or diagrammatic representations, such as supply-and-demand graphs, or even as verbal arguments in prose [3]. Therefore, the statement that they can be expressed only through equations is incorrect, as visual and qualitative models are widely used in economic analysis and teaching.

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 2: National Income Accounting > 2.2 CIRCULAR FLOW OF INCOME AND METHODS OF CALCULATING NATIONAL INCOME > p. 16
2. [3] https://en.wikipedia.org/wiki/Economic_model
3. [4] https://www.sciencedirect.com/topics/economics-econometrics-and-finance/macroeconomic-model