ECON 1BB3 Lecture Notes - Lecture 2: Scientific Method

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Express ideas in economics: english language, algebra/ equations, diagrams/ graphs. Science= use of scientific method: observe theorize test theory. Microeconomics; individual households and firms and how they interact. Macroeconomics: economy-wide phenomena such as interest rates, unemployment, money and growth. Normative: the world as it should be / how it ought to be : value judgement. If you can answer it without consulting your own beliefs then it is positive, opposite for normative. Diagram and equations assumptions variables eg. map of city, useful because it is simple and uncomplicated. Classify variables real variables (physical quantities) vs. nominal variables ($) stock variables (snapshot at a point in time) vs. flow variables (time element; per year, per minute)