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Unformatted text preview: • Microeconomics-Study of household and firm behavior and how they interact in the marketplace • Macroeconomics-Study of the whole economy, including the topics of inflation, unemployment, and economic growth. • Aggregate-The total amount Section 4 • Correlation-When two events occur together • Causation-When one event brings about another event • Fallacy of Composition-The incorrect view that what is true for the individual is always true for the group. Section 5 • Positive Analysis-an objective, testable statement that describes what happens and why it happens • Normative Analysis-A subjective, contestable statement that attempts to describe what should be done....
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- Fall '08
- Economics, Normative Analysis- A, testable proposition Empirical, Problem- Scarcity forces, hypothesis Ceteris Paribus