Economic Models Economists use models to simplify reality in order to improve our understanding of the world TTwo of the most basic economic models include The circular Flow model The production possibilities frontier Harcourt, Inc. items and derived items copyright o 200l by harcourt, IncHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Economic Models Economists use models to simplify reality in order to improve our understanding of the world Two of the most basic economic models include: The Circular Flow Model The Production Possibilities Frontier