Unformatted text preview: – a state or condition that will continue indefinitely as long as factors exogenous to the system remain unchanged 2.7. Comparative statics – analysis used to examine how a change in some exogenous variable will affect the level of some endogenous variable in an economic system 3. Positive and Normative Analysis 3.1. Positive analysis – analysis that attempts to explain how an economic system works or to predict how it will change over time “What is happening?” 3.2. Normative analysis – analysis that typically focuses on issues of social welfare, examining what will enhance or detract from the common good “ What should be done?”...
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This note was uploaded on 10/29/2007 for the course ECON 50 taught by Professor Abramitzky,r during the Fall '07 term at Stanford.
- Fall '07