theme 1 nature of economics Flashcards
define ceteris paribus
while the effects of one variable are being investigated, all other variables remain unchanged
define law
a universally accepted theory verified by empirical evidence
define normative statement
a value judgement that cannot be supported or refuted
define normative economics
the study and presentation of policy prescriptions involving value judgements on how scarce resources should be allocated
positive statement
a statement that can be supported or refuted by evidence
positive economics
the scientific or objective study of the allocation of resources
scientific method
a method which subjects theories of hypotheses to falsification by empirical evidence
social science
the study of societies and human behaviour using a variety of methods, including the scientific method
theory/model
a hypothesis capable of refutation by empirical evidence
base period
the period eg. year or month with which all other values in a series are compared
index number
an indicator showing the relative value of one number to another from a base of 100
nominal values
values unadjusted for the effects of inflation aka. at current prices
real values
values adjusted for inflation
