ECON 208 Chapter Notes - Chapter 2: Time Series, Dependent And Independent Variables, Absolute Difference

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: El- Attar Mayssun

Document Summary

Chapter 2 economic theories, data, and graphs (to print) Normative: advice based on value judgment, what ought to be. Distinguishing what is actually true from what we would like to be true requires distinguishing between positive and normative statements. Poor communication, ignorance, distinction between positive and normative statement. Constructed to explain past events and predict future events. Theories are distinguished by their variables, assumptions and predictions. Variables: a well defined item such as price or quantity that can take on. Variables: a well defined item such as price or quantity that can take on different possible values. Endogenous variable: value determined within the theory. Exogenous variable: influence endogenous variable but is itself determined outside the theory. Ex: weather that can affect the amount of egg consumers demand or producers supply but weather is not affected by the market of eggs. Assumptions: motives, directions of causation and the conditions under which the theory is meant to apply.