One of the common error in reasoning with the use of economic model is fallacy. It is a common error because of its way of having to use faulty reasoning, as this type usually made use of invalid reasons. It usually tackles wrong moves, making errors.
Answer:
A common error with economic models is the measurement errors that are incurred in the observations that exist on the variables that enter a given model, for example, consumption and income.
Explanation:
In the event that the data are observational, that is, they come from a world where everything varies at the same time, the changes that occur in the variable under study are produced by changes in the infinity of economic variables. Therefore, the analyst selects the set of variables that are considered relevant. But, there are variables that have been irrelevant and have been eliminated from the model in order to simplify the operability of the model. Its consequence is that in addition to the observation errors, the errors of the theory specification also appear.
