Chapter 1.3, Problem 2R

To determine

To explain the model used by the economist for the practical reach to know what happens in the world.

Answer to Problem 2R

  

Explanation of Solution

A pattern is followed to come to the desired result:

· Identifying the problem: This step is the initial step where the idea is generated of what to do basically and what to be studied as per the required results.

· Gathering the data required: Then the next step is to gather the relevant data required as per the study to be conducted so as to make it simple to understand the trend it is following.

· Creating a model of hypothesis: Next step is to ascertain a model or a hypothesis in the language of economics so that the data collected can be easily predicted.

· Testing the hypothesis: The second last is to test the prediction formulated in the previous step to check if it stands true or not. Testing of hypothesis is one of the most important stages as it provides validity to the work done with being unbiased.

· Analysis of the results: The last step is to know if the data matches with the testing of the hypothesis which shows the study to be true or not. If not, again the rework should be done with better analysis.

Economics Concept Introduction

Introduction:

There exists the scientific method in economics to reach on to the position of getting results related to economy with studying the data followed by understanding a pattern it follows and then ascertaining the outcomes or the final results.