LS 2

Question 1

What does economics use to explain the economy?

Answer 1

Models

Question 2

What can models be used for?

Answer 2

To predict the outcome of an economic change

Question 3

Why is it difficult for economists to conduct scientific experiments?

Answer 3

• You can’t put an economy in a laboratory

- It is difficult to run experiments because control groups are incredibly expensive

Question 4

What do economists rely on to make models?

Answer 4

Data

Assumptions

Question 5

What is ‘Ceteris paribus’?

Answer 5

This is a way of saying ‘assuming all other variables remain unchanged’
This is important because there are a lot of factors that can impact economic activity.

Question 6

What is a phenomena?

Answer 6

This is an economic event that can be observed to provide factual info

Question 7

What are theoretical models?

Answer 7

Models used to explain or predict economic phenomena without any numerical values

Question 8

What are empirical models?

Answer 8

A model with figures to support a projected forecast of what may happen, in order to help explain the outcomes of an economic phenomena