Multiple Choice
Economic groups have an advantage over noneconomic groups in part because:
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0. Basic Principles of Economics
Positive and Normative Analysis
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A strong economic model allows us to analyze the economic events of the world by:
A
making objective predictions based on observed data
B
focusing solely on normative statements
C
ignoring empirical evidence in favor of personal beliefs
D
imposing value judgments about what should happen
Verified step by step guidance1
Understand the purpose of an economic model: it is designed to simplify reality in order to analyze economic events and make predictions.
Recognize that a strong economic model relies on objective analysis, which means it uses observed data rather than personal beliefs or value judgments.
Recall that normative statements involve opinions about what should happen, while positive statements are objective and testable based on data.
Identify that ignoring empirical evidence or focusing solely on normative statements weakens the model's ability to make accurate predictions.
Conclude that the correct role of a strong economic model is to make objective predictions based on observed data, which allows economists to analyze and understand economic phenomena effectively.
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