Economics As A Social Science

Question 1

Thinking like an economist:the process of developing models in economics, including the need to make assumptions

Answer 1

Economists make assumptions to help create models and understand the economy. These assumptions help simplify their analysis. Eg PPF

Question 2

The use of ceteris paribus assumption in building models

Answer 2

Majority of models assume all things remain equal (ceteris paribus) thus allowing them to focus on the particular changes in the economy that will take place as a result policy changes. For example when identifying the effects that a decrease in interest rates will have on aggregate demand, only components of AD will be considered. Other determinants not included may be used in evaluation.

Question 3

The inability in economics to make scientific experiments

Answer 3

Rather than proving the relationship between two variables through experiments, economists do this through the use of simplified models. Models in economics make it easier to justify changes within the economy.