Chapter 2 - Positive statements to describe the world as it...

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The Role Of Assumptions Economists make assumptions in order to make the world easier to understand The art in scientific thinking is deciding which predictions to make Economists use different theories to answer different questions Economic Models The most basic economic models are: The circular flow diagram The production possibilities frontier Supply-Demand Model Phillip’s Curve The economist as Policy Advisor To explain the world, they are scientists.
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Unformatted text preview: Positive statements to describe the world as it is. Called descriptive analysis To change the world, they are policy-advisors Normative statements Why Economists disagree They may disagree about the validity of alternative positive theories about how the world should work They may have different values and therefore different normative views about what policy should try to accomplish...
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This note was uploaded on 01/25/2012 for the course ECON 2106 taught by Professor Minjaesong during the Fall '06 term at Georgia Institute of Technology.

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