A simplified system used to simulate some aspects of the real economy. Economics is bound to use simplified models: the real world economy is so large and complicated that it cannot be fully described in finite time or space. A good model concentrates on the point it is studying and leaves out anything not essential to this. Models vary between the very simple, for example the IS-LM model, and large econometric models with thousands of equations. The results of any change in the assumptions of an economic model can be worked out, either by theory or numerical calculation; whether the results generalize to the real world can only be found out by experience. If model-builders have picked the right aspects of reality to include in their models, there will be some approximate resemblance between the model's predictions and the real economy.

• base-weighted index
• base year
• basic rate
• basis point
• batch production
• Bayesian statistics
• BBB
• BCCI
• BEA
• bear
• bearer bond
• bearer security
• bear market
• before-tax income
• beggar-my-neighbour policy
• behavioural theories of the firm
• bell curve
• below-the-line
• benefit
• benefit-cost analysis
• benefit principle
• benefits
• benefits in kind
• benefits system
• Benelux