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Unformatted text preview: resources it has available b. Shows trade-off between the outputs of different goods at a given time, but the trade-off can change over time 4. Microeconomics and Macroeconomics a. Micro: the study of how households and firms make decisions and how they interact in markets b. Macro: the study of economy wide phenomena, including inflation, unemployment and economic growth The Economist as Policy Adviser 5. Positive versus Normative Analysis a. Positive Statements: claims that attempt to describe the world as it is b. Normative Statements: claims that attempt to prescribe how the world should be c. Key difference between the two= how we judge their validity c.i. Involves our views on ethics, religion and political philosophy Why Economists Disagree-Economists may disagree about the validity of alternative positive theories about how the world works-Economists may have different values and therefore different normative views about what policy should try to accomplish...
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- Spring '09