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