Chapter 2 - Thinking Like an Economist

Issac Newton

Issac Newton

________ developed a theory in the 17th- century that stated that gravity applies to any two objects in the universe.

effectiveness of equality

A policy could risk its ________ by increasing its efficiency.

macroeconomist

A(n) ________, for instance, could study the effects of borrowing by the federal government or how the economy's unemployment rate changes over time.

Pie Charts

Economists can use ________, Bar Graphs, or Time- Series Graphs.

scientific method

The ________ is a dispassionate development and testing of theories about how the world works.

Economists

________ can be both scientists and policy advisers, or one of the two.

math

An economist must deeply understand symbols, history, ________, philosophy, and politics.

Federal Reserve

The ________ sets the nation's monetary policy and employs hundreds of economics throughout the world to analyze developments in each country.

coordinate system

A(n) ________ could include curves.

variables

When two ________ move in the same direction, they 're positively related.

Microeconomics

________: the study of how households and firms make decisions and how they interact in markets.

Normative statements

________ focus more so on a person's values and views on ethics, religions, and political philosophy.

Positive statements

________: claims that attempt to describe the world as it is.

Households

________ include buying and consuming goods, and services, while also owning and selling factors of production.

Demand curves

________ can trace out the effect of a good's price on the quantity of the good consumers want to buy.

factors of production

A firm produces and sells goods, and services, while also hiring and using ________.

Oil prices

________ may skyrocket globally after the war in the Middle East interrupts the supply of crude oil.

flow diagram

Circular- ________: a visual model of the economy that shows how dollars flow through markets among households and firms.

Graphs

________ can express ideas in an easier way than equations or words could express it.

individual households

Economics can be studied on various levels: decisions made by ________ and firms, interactions between households and firms in markets that are specific to their goods and services, or the operation of the economy as a whole.

Labor

In the Department of ________, economists analyze data on workers and people searching for work, in order to help form labor- market policies.

Grade point averages

________ can be measured on a coordinate system.

Scientist POV

________: Minimum- wage laws cause unemployment.

Office of Management and Budget

In the ________, economists assist with formulating spending plans and regulatory policies.

Graphs help economists

________ express concepts with numbers and variables that are related to one another.

variables

When two ________ move in opposite directions, they 're negatively related.

Coordinate System

The ________ can be used in graphs to represent two variables, whether they 're changing over time or across individuals.

Macroeconomics

________: the study of economy- wide phenomena, including inflation, unemployment, and economic growth.

Positive statements

________ can be confirmed or refuted by analyzing data on changes in minimum wages, as well as the rate of unemployment over time.