ECONOMICS AS APPLIED SCIENCE Flashcards
this study employs the use of the comprehension obtained from economic theory and past events to make better decisions and solve real-world problems.
APPLIED ECONOMICS
refers to the economic principles, theories and its application in real events and an attempt to forecast whatever the outcomes.
APPLIED ECONOMICS
a method of inquiry from identifying a problem, proposing alternative tentative answers or hypotheses, testing the tentative answers to questions or problems at hand, gathering and treating the data, and answering the question through the conclusion. as proof in testing hypothesis, statistics and econometrics are being used.
SCIENTIFIC METHOD
STEPS IN SCIENTIFIC METHOD
observation → question → hypothesis →
experiment → conclusion → result
cause and effect.
POSITIVE ECONOMICS
it also deals with what is currently happening like unemployment rate, inflation rate, and cut in income tax improving the incentives to find jobs.
POSITIVE ECONOMICS
the study of “WHAT IS” in economic matters.
POSITIVE ECONOMICS
it allows us to test the statement with the date and which relies on objective analysis of data.
POSITIVE ECONOMICS
statements can’t be tested because it is just a mere opinion. therefore, normative economics focuses on opinion-based analysis of data.
NORMATIVE ECONOMICS
it conveys values, opinions, and judgements about the effects brought by economic practices if there are modifications in the public policies.
NORMATIVE ECONOMICS
judgement and opinion.
NORMATIVE ECONOMICS
the study of “WHAT SHOULD BE” in economic matters.
NORMATIVE ECONOMICS
MEASURING THE ECONOMY
GROSS DOMESTIC PRODUCT (GDP)
GROSS NATIONAL PRODUCT (GNP)
it quantifies the monetary value of final products whether goods or services induced in the country in a specific period of time.
GROSS DOMESTIC PRODUCT (GDP)
measures the total income that is earned by a country’s factor of production in producing goods and providing services by a country’s residents and businesses.
GROSS NATIONAL PRODUCT (GNP)
