economic methods and economic questions

Question 1

scientific method (2)

Answer 1

developing models that explain some part of the world
testing those models using data to see how closely the model matches what we actually observe

Question 2

model

Answer 2

simplified description of reality
predictions that can be tested with data

Question 3

empirical evidence

Answer 3

facts that are obtained through observation and measurement

Question 4

causation vs correlation

Answer 4

one thing directly affects another vs two variables tend to change at the same time

Question 5

why isn’t correlation the same thing as causality? (2)

Answer 5

omitted variables
reversed causality (opposite direction)

Question 6

how to find the difference between correlation and causality

Answer 6

experiment

Question 7

experiment (controlled vs natural)

Answer 7

controlled method of investigating causal relationships among variables
controlled: randomly put into treatment and control groups
natural: assigned subjects to control and treatment groups (before and after event)