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Tools For Economic Analysis

Economists construct theories to explain relationships and test them using various tools of analysis. They gather evidence to support or disprove theories, making persuasive arguments. Graphs can show relationships between two variables over time. Mathematical models like linear regression analysis determine the impact of one variable on others, allowing rigorous study of complex economic issues.

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82 views1 page

Tools For Economic Analysis

Economists construct theories to explain relationships and test them using various tools of analysis. They gather evidence to support or disprove theories, making persuasive arguments. Graphs can show relationships between two variables over time. Mathematical models like linear regression analysis determine the impact of one variable on others, allowing rigorous study of complex economic issues.

Uploaded by

Murali Daren
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Models and Theories

 Like scientists, economists and economic analysts observe the world and construct
theories about why things happen or whether specific relationships exist. After an economist
constructs a theory, he tries to find information that supports or disproves his theory.
Although an economist can never prove her theory definitively, her theory becomes more
persuasive as she finds more evidence to support it..

Graphs
 Creating a graph is a great way for economic analysts to show a relationship between two
variables. For example, an economist who wants to analyze unemployment statistics over 50
years can create a graph with the year (e.g. 2000, 2001) on the x-axis and the rate of
unemployment on the y-axis.

Read more: Tools for Economic Analysis | eHow.com


http://www.ehow.com/facts_6908095_tools-economic-analysis.html#ixzz0yjj8sDYu

Mathematical Analysis
 Most modern-day economic analysis involves a lot of mathematical calculation. One
popular mathematical calculation is linear regression analysis (LRA). LRA allows economists
to determine the extent to which one variable affects the others. For example, if you want to
know how much the weather affects attendance at baseball games and the happiness of the
fans at the game, you can run a LRA. Such analysis is complicated, but rigorous study of
mathematics makes it a lot easier.

Read more: Tools for Economic Analysis | eHow.com


http://www.ehow.com/facts_6908095_tools-economic-analysis.html#ixzz0yjjHn5cp

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