Economists, like mathematicians, physicists, and biologists,

• make use of the scientific method.

• try to address their subject with a scientist’s objectivity.

• devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.

• All of the above are correct.

The goal of an economist who formulates new theories is to

• provide an interesting framework of analysis, whether or not the framework turns out to be of much use in understanding how the world works.

• provoke stimulating debate in scientific journals.

• contribute to an understanding of how the world works.

• demonstrate that economists, like other scientists, can formulate testable theories.

With respect to how economists study the economy, which of the following statements is most accurate?

• Economists study the past, but they do not try to predict the future.

• Economists use “rules of thumb” to predict the future.

• Economists devise theories, collect data, and analyze the data to test the theories.

• Economists use controlled experiments in much the same way that biologists and physicists do.

In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often difficult and sometimes impossible to

• make use of theory and observation.

• rely upon the scientific method.

• conduct laboratory experiments.

• find articles or books that were written before 1900.

Instead of conducting laboratory experiments to generate data to test their theories, economists often

• ask winners of the Nobel Prize in Economics to evaluate their theories.

• argue that data is impossible to collect in economics.

• gather data from historical episodes of economic change.

• assume that data would support their theories.

One thing economists do to help them understand how the real world works is

• make assumptions.

• ignore the past.

• try to capture every aspect of the real world in the models they construct.

• All of the above are correct.

Normative statements are

• prescriptive, whereas positive statements are descriptive.

• descriptive, whereas positive statements are prescriptive.

• backward-looking, whereas positive statements are forward-looking.

• forward-looking, whereas positive statements are backward-looking.

Positive statements are

• prescriptive.

• claims about how the world should be.

• claims about how the world is.

• made by economists speaking as policy advisers.

Economists sometimes give conflicting advice because

• graduate students in economics are encouraged to argue with each other.

• economists have different values and scientific judgment.

• economists acting as scientists do not like to agree with economists acting as policy advisers.

• economics is more of a belief system than a science.

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

• similar opinions about the validity of economic theories

• significant differences in education

• differences in personal values

• a reliance on normative statement for research theories