ECON 10010 Chapter 2: Chapter 2

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6 Oct 2016
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Economists approach the study of the economy in the same way that a scientist does. They devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. Scientific method: the dispassionate development and testing of theories about how the world works as applicable to studying a nation"s economy as it is to studying other sciences. The scientific method: observation, theory, and more observation. Example of an economist using the scientific method: This interplay between theory and observation also occurs in economics. An economist might live in a country experiencing rapidly increasing prices and be moved by this observation to develop a theory of inflation. The theory might assert that high inflation arises when the government prints too much money. To test this theory, the economist could collect and analyze data on prices and money from many different countries.

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