To oversimplify is to take a subject and reduce it down to such a simple explanation that some meaning is lost.(verb)
When you try to explain a complicated economic concept and you lose such simple terms that you distort the meaning of the economic concept, this is an example of when you oversimplify.
See oversimplify in Webster's New World College Dictionary
See oversimplify in American Heritage Dictionary 4
verb o·ver·sim·pli·fied, o·ver·sim·pli·fy·ing, o·ver·sim·pli·fies verb, transitive
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