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Unformatted text preview: : Focus on the variables in question while controlling for other effects not assumed to change. Normative vs. Positive Positive economic statement – a statement that can be proved or disproved by reference to facts. Normative economic statement – reflects an opinion, which cannot be proved or disproved by facts. “Positive statements” concern what is ; “normative statements” concern what should be . “The random actions of individuals tend to offset one another, so the average behavior of a large group can be predicted more accurately than the behavior of a particular individual” Association – is causation fallacy : incorrect idea that if two variables are associated in time, one must cause the other. Fallacy of composition : false belief that what is true for the individual must be true for the group....
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- Spring '08
- Economics, real world, normative economic statement, Variables -A variable