1.1.1 + 1.1.2 Economics as a social science and statements

Question 1

Why are models used in economics

Answer 1

to understand the economy based on assumptions
to simplify analysis
cant use scientific experiments
we should always evaluate assumptions of models

Question 2

What does Ceteris Paribus mean

Answer 2

‘all other things being equal’
when considering the impact of one variable hold other influences constant

Question 3

What are positive statements

Answer 3

objective, can be tested using evidence
e.g public sector debt is 85% of GDP

Question 4

What are normative statements

Answer 4

value judgements, cannot be tested
e.g students shouldn’t pay for uni fees

Question 5

How are decisions influenced

Answer 5

policies made are influenced by value judgements and positive analysis is used to form these normative judgements