Micro 2 - Chapter 2 The Economist As Scientist -economists...

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Chapter 2 The Economist As Scientist -economists plays two roles 1. Scientists: try to explain the world 2. Policy advisors: try to improve it -first, economists employ the scientific method The Scientific Method: Observation, theory, and more obversation -although economists use theory and observation like other scientists, they face an obstacle that makes their task challenging: they are unable to conduct experiments -economists usually have to make do with whatever data the world happens to give them The Role of Assumptions -Economists make assumptions: Assumptions can simplify the complex world and make it easier to understand. -Economists use different assumptions to answer different questions. -for example: for studying the short-run effects of the policy, we may assume that prices do not change much. For studying the long-run effects of the policy, however, we may assume that all prices are completely flexible. Economic Models
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This note was uploaded on 02/08/2012 for the course ECONOMICS 220:102 taught by Professor Zhang during the Fall '09 term at Rutgers.

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Micro 2 - Chapter 2 The Economist As Scientist -economists...

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