Economics TOK Reflection

After my HL TOK economics class, interesting questions and discussions led to the statements which was “all models are wrong but some are useful.” To explain this quote, I would like to use the Neo-Classical model in economics. Firstly, the Neo-Classical model represents an economies Long Run Aggregate Supply, in relation to the Short Run Aggregate Supply and the Aggregate Demand. Using this model, we are able to illustrate current economic states and predict future changes to the economy due to outside influencing factors. However, this model is incorrect as variable as during the economic great depression in 1929 to 1939, the Keynesian model disagreed with the overly optimistic Neo-classical model, and the standard model that would represent a countries economy was changed to the Keynesian mode. This just shows that models in economy are not always correct, and may be overturned by new models due to the limitations within what a model is able to represent.

In Physics, a similar situation can be portrayed with the use of absolute zero (kelvin scale model). As scientists use kelvin to determine average kinetic energy of a particle, when particles reach absolute zero, there should be no kinetic energy meaning that the particles should be completely still. However, we all know that Physics is relative, meaning that absolute zero is only relative on a small scale, and could not be represented if we take the molecules into a larger context like a galaxy, as we know a galaxy moves which would move the molecules. Hence, there are limitations to the absolute zero and kelvin model.

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