Why Do Economists Make Assumptions?
It is a normal thing for economists to make assumptions. The unpredictability of an economy is probably the main factor why economists do these things. As you may already know, economics deals with the production and distribution of products and services. This also involves the consumption of these products which affects the supply and demand in the market.
Assumptions by nature are based on theories and common beliefs. It may include facts at times which help economists make a more ‘precise, assumption and make decisions that they think is right. Although the basis of their theories is sometimes subjected to debates, they firmly believe that their actions will always affect the greater good for the economy.
They also do these assumptions to limit potential threats that might destroy the economy and promote healthier competition for the different products in the market. They live in a much more complicated world than normal people see and understand. They will always think about different factors that might have impact on the country itself. It is like filtering valuable ideas, they discard the useless ideas and holds the valuable ones and explores their possibilities. It may seem unfair, but that is how they work and that makes the world go round.
The questions that economists use in their decision making are probably one of the following:
Ã’šÃ‚· What is right or wrong?
Ã’šÃ‚· What will work out or not?
Ã’šÃ‚· What is true or false?
Ã’šÃ‚· What is important or not?
Ã’šÃ‚· What is needed and what is not?
These are some of the questions that people believed is necessary to produce theories needed to make a precise ‘economic assumption,. In our present world, this is a natural event and people that are updated in the world of economics are already used to the idea. For better or worse, the fate of the economy lies on their hands
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