Macroeconomics: Principles, Problems, & Policies 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0-07766-077-3
ISBN 13: 978-0-07766-077-2

Chapter 1 - Limits, Alternatives and Choices - Discussion Questions - Page 21: 4


Key elements of the scientific method are: *Observing outcomes and behaviours in the real world * Creating a hypothesis based on these observations * Testing the hypothesis * Accepting or rejecting the hypothesis

Work Step by Step

There are economic theories and principals that predict the actions of individuals and firms. These principles contain generalizations and assumptions to make them more simplified, and can be expressed graphically. This is very similar to the scientific method of testing hypotheses.
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