ARE 201 Lab 2

Using the economic method to make decisions the

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Unformatted text preview: ease. Using the Economic Method to Make Decisions The economic method is comprised of: 11. List the steps below. a) Step 1: The observation of phenomena Step 2: The formulation of a hypothesis concerning the phenomena Step 3: Experimentation to demonstrate the truth or falseness of the hypothesis Step 4: Develop a conclusion that validates or modifies the hypothesis b) Step 1: Identify and state the problem Step 2: Apply the relevant economic model Step 3: Identify the solutions Step 4: Evaluate the solutions Step 5: Select and implement a solution c) Step 1: Collect relevant data/phenomenon Step 2: Apply the corresponding models Step 3: Identify the solutions Step 4: Develop a conclusion that validates or modifies the hypothesis 5 Calculating the Purchasing Power of a Dollar. A dollar today is worth less (purchases less) than a dollar last year because of inflation. For example, \$10 in 2008 bought fewer goods and services than \$10 did in 1990. You should refer to Chapter 1 in Everyday Economics by Michael L. Walden in working the problems below. You have to show all of your work to receive full credit. To compare the purchasing power of a dollar amount in one year with the purchasing power of a dollar amount in a different year, you have to calculate the purchasing power of the two dollar amounts during a common year, or what is often referred to as the base yea...
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This lab report was uploaded on 02/19/2014 for the course ARE 201 taught by Professor Eryuruk during the Spring '08 term at N.C. State.

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