Economics Chp 1 Flashcard

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The first step in executing an economic model is to

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define the problem.

Front

Economic models are useful because they

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show the way people react to changes in the economy.

Front

Why can't economic models judge whether policies are good or bad?

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Political beliefs determine economic theories.

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Different schools of economic thought exist because economists interpret facts differently.

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economists interpret facts differently.

Front

an assumption involving two or more variables that must be tested for validity

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hypothesis

Front

the production and distribution of goods and services in a society

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economy

Front

the beliefs or characteristics that a person or group considers important

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values

Front

a theory or simplified representation that helps explain economic behavior in the real world

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Economic Model

Front

Governmental "hands off" policy concerning business and consumer affairs

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Laissez-faire

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human effort directed toward producing goods and services

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labor