1153 - in the real world. www.thinkwell.com...

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www.thinkwell.com info@thinkwell.com Copyright 2000, Thinkwell Corp. All Rights Reserved. 1153 –rev 10/25/2000 What Economists Do ! Economics employs the scientific method by asking questions, producing explanations (models), and forming hypotheses. ! Economists have integrated into the fields of business, government, and academia. ! Positive economics is predictive, or descriptive, whereas normative economics is judgmental, or evaluative. The illustration on the right exemplifies the questions economists ask. Economists must explore all possibilities in their efforts to establish optimal economic conditions. The example of the economic model on the left shows us how economists might answer the questions they face. After creating the hypothesis, economists must test it in the real world by collecting data and comparing it to the model. If the data matches the predictions of the model, economists have explained a condition
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Unformatted text preview: in the real world. www.thinkwell.com info@thinkwell.com Copyright 2000, Thinkwell Corp. All Rights Reserved. 1153 rev 10/25/2000 Economists in business help make forecasts about when to launch new products and enter foreign markets. Government economists collect data, conduct research, devise plans to finance the national debt, and make decisions regarding implementation of new taxes. Economists in academia teach, conduct research, and publish and present reports of their findings. Positive economics is economics as a predictive, descriptive social science. It answers specific questions in economics. Positive economics seeks to answer the question, How will the world work? Normative economics is about making judgments or evaluations. It is about norms, or standards of judgment. Normative economics seeks to answer the question, How should the world work?...
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1153 - in the real world. www.thinkwell.com...

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