SS201- Block 1

data

facts, measurements, or statistics that describe the world

Causation

More economic growth and higher employment levels is likely to be _______.

Causation

More police officers and lower crime rates is likely to be ______.

Reverse Causality

When we mix up the direction of cause and effect

anedotes

Small sample of people to make a statistical relationship

Causation

one thing directly affects another through a cause and affect relationship

Model

simplified description, or representation of the world

omitted variables

something that has been left out of a study that, if included, would explain why two variables that are in the study are correlated

Empricism

the heart of scientific analysis

correlation

there is a mutual relationship between two things

negative correlation

two variables tend to move in opposite direction

Blanket statement

A statement that includes "every" or "no one," etc

Experiment

Controlled method of investigating causal relationships among variables

a logical cause and effect relationship

Causation occurs when there is ______.

No the model is a simplified representation of reality

During a meeting with your client, the CEO asks if your economic models include all factors that impact gas prices. What's your response?

they test their models against real world data

How do economist distinguish between models that work and those that don't?

A natural experiment uses existing variation, while a randomized experiment generates variation

How does a natural experiment differ from a randomized one?

The larger the sample size the better

How does sample size affect the validity of an empirical argument?

Randomization

The assignment of subjects by chance, rather than choice, to a treatment group or control group

Almost the same

The human capital argument implies that a college student who drops out of college should earn ______ as a student who graduated.

Correlation

The length of women's skirts and stock market performance is likely to be _______.

much less

The signaling argument implies that a college student who drops out should earn _____ than a student who graduated.

on going process to develop models of the world then test and evolution these models

To say that economist use the scientific method means that they are using _________-

Positive correlation

Two variables tend to move in the same direction

Randomized, because a natural experiment might not be completely random

What experiment (randomized or natural) is more likely to yield to accurate results?

Randomized, because seat belt rules may be influenced by road accident fatalities

Would you choose to run a randomized experiment or a natural experiment on finding the effect of seat belt rules on road accident fatalities?

testing its predictions; empirical data

You confirm accuracy of an economic model by _______ with _______.

Natural experiment

an empirical study in which some process, out of the control of the experimenter, has assigned subjects to control and treatment groups in a random or nearly random way

variable

factor that is likely to change

Empirical evidence

set of facts established by observation and measurement

zero correlation

when variables have movements that are unrelated