Method & Historical Approaches

Question 1

What is the scientific method in economics?

Answer 1

The scientific method in economics involves testing hypotheses, collecting data, and verifying results to explain economic phenomena.

Question 2

How does the scientific method relate to economic theory?

Answer 2

The scientific method helps economists form theories that explain the mechanisms of the economy, which can then be tested and verified.

Question 3

What is an economic model?

Answer 3

An economic model is a simplified representation of economic processes using variables and relationships between them.

Question 4

How does the deductive reasoning approach work in economics?

Answer 4

Deductive reasoning begins with a general theory and narrows down to specific hypotheses that are tested through observation.

Question 5

What is the inductive reasoning approach in economics?

Answer 5

Inductive reasoning starts with specific observations and develops general theories based on patterns and regularities identified.

Question 6

What are the key components of the scientific method in economics?

Answer 6

The key components include models, theories, principles, world view, hypotheses, and verification.

Question 7

What is the role of hypotheses in the scientific method?

Answer 7

Hypotheses propose a reasonable relationship or explanation based on existing theories and are tested against real-world data.

Question 8

How does verification work in the scientific method?

Answer 8

Verification involves comparing experimental results with predictions to confirm or reject hypotheses.

Question 9

How does the concept of “world view” affect economic analysis?

Answer 9

World views shape assumptions about how the economy functions, often based on untestable beliefs or values (e.g., political philosophies, religious beliefs).

Question 10

What is the difference between inductive and deductive reasoning in economics?

Answer 10

Inductive reasoning is open-ended and exploratory, while deductive reasoning is focused on confirming or rejecting a specific hypothesis.

Question 11

How does the neo-classical approach to economics differ from classical thought?

Answer 11

The neo-classical approach modifies classical ideas, combining both inductive and deductive reasoning in economic analysis.

Question 12

What does the welfare approach to economics emphasize?

Answer 12

The welfare approach focuses on adopting policies to maximize social welfare, rather than just market efficiency.

Question 13

What role did Thomas Aquinas play in medieval economic thought?

Answer 13

Thomas Aquinas argued that businesses had a moral obligation to sell goods at a just price, influencing medieval economic thinking.

Question 14

What is the chronological approach to the history of economic thought?

Answer 14

The chronological approach studies the development of economic ideas over time, looking at the continuity and evolution of theories.

Question 15

What is the Keynesian approach to economics?

Answer 15

The Keynesian approach emphasizes the role of government intervention in managing economic cycles and aggregate demand.

Question 16

Why is experimentation important in the scientific method?

Answer 16

Experimentation allows for testing hypotheses and verifying economic theories by comparing predicted and actual results.

Question 17

How do the principles in economics relate to theories?

Answer 17

Principles are fundamental laws that form the basis of theories, which explain and predict economic behavior and outcomes.

Question 18

What is the role of the ‘world view’ in shaping economic models and theories?

Answer 18

A world view includes unverified beliefs that influence how economists interpret data and frame economic models and theories.

Question 19

How does the history of economic thought trace the evolution of economic ideas?

Answer 19

The history of economic thought explores how different thinkers contributed to the development of economic theories and how those ideas interacted with their context.

Question 20

How do inductive and deductive reasoning work together in economic research?

Answer 20

Both reasoning methods complement each other by enabling economists to both explore new ideas (inductive) and confirm specific hypotheses (deductive).