ECN 104 Chapter Notes - Chapter 2: Environment And Climate Change Canada, Department Of Finance Canada, Capital Accumulation

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: Frank Trimnell

Document Summary

The scientific method: observation, theory, and more observation: experiments are often difficult in economics, physicists studying gravity can drop many objects in their laboratories to generate data to test their theories. By contrast, economists studying inflation are not allowed to manipulate a nation"s monetary policy simply to generate useful data. Economists usually have to make do with whatever data the world happens to give them: pay close attention to natural experiments offered by history. Once we understand international trade in an imaginary world with two countries and two goods, we are in a better position to understand international trade in the more complex world in which we live. Economic models: economists use models to learn about the world that are most often composed of diagrams and equations, economic models omit many details to allow us to see what is truly important.