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The Economic Truth

The Economic Truth. The bold knowledge of micro economic theory. Economic Thoughts: The basic lesson unfolds. You cannot understand government budget, regulating industries, foreign trade unless you mastered its rudiments

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The Economic Truth

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  1. The Economic Truth The bold knowledge of micro economic theory

  2. Economic Thoughts: The basic lesson unfolds You cannot understand government budget, regulating industries, foreign trade unless you mastered its rudiments Your future is not only dependent on your own ability but also dependent upon economic force beyond your control Without economics, the dice of life is loaded against you

  3. The many definition of ECONOMICS It is devoted to understanding how society allocates its scarce resources Its asks what goods are produced, how these goods are produced and for whom Analyzes movements in the overall economy It’s the study of commerce among nations It’s the science of choice It’s the study of money banking and capital

  4. The insane way: A scientific approach Limit the answer to the important issues of economics Scientific approach in economics helped the economist understand complex forces in the economy

  5. Economic Analysis: In a nut shell Facts is insignificant without the accounts of history Cause and effect are essential tool for analysis It analyses the impact of a public policy or decision It is important to learn the economic tools such as supply and demand and cost schedules

  6. Using Data: Statistical Analysis Data is used to analyze economic behaviour quantitatively The information may require knowledge about probability and econometrics but the results only require careful reading and common sense An economist may also employ experimentations called “Controlled Experiments” to analyze problems in economics Economic science progresses using the 4 economic technique like observation, economic analysis, statistical analysis and experiments

  7. Learning the Pitfalls of economic reasoning An economic problem involves forces interacting at the same time The key step to isolate the impact of a single variable is to hold other things equal Ask yourself what would happen if the other variables are equal If you don’t exclude the effects of other changing variables, you cannot accurately gauge the impact of the change

  8. The Post Hoc Fallacy The fact that event A takes place before event B does not prove that event A caused event B. To conclude that “after the event” implies “because of the event” is to commit the post hoc fallacy.

  9. The fallacy of composition **What is true for a part is therefore true for the whole What holds for an individual does not necessarily hold for the group What seems to be true for individuals is not always true for a society as a whole

  10. The greatest obstacle in economics SUBJECTIVITY To uncover objective reality is When you, our minds are open to new ideas As we grow up we begin to organize our ideas Science belongs to the young to become subjective because the old know too much things that are untrue but that they cannot unlearn

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