9708 · 1.2
Economic methodology flashcards
Revision flashcards for Cambridge 9708 Economic methodology (syllabus 1.2). Flip, recall, then mark a real past-paper question.
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What is a positive statement?
A testable statement about what is — can be verified with evidence (e.g. "Unemployment is 5%").
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What is a normative statement?
A value judgement about what ought to be — contains words like should, ought, fair (e.g. "Tax should be cut").
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What does ceteris paribus mean?
All other things being equal — isolates the effect of one variable by holding others constant.
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Why do economists use models?
To simplify reality, explain behaviour, and make predictions — assumptions must be stated clearly.
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Give one limitation of economic models.
Assumptions may not hold (e.g. rational behaviour); models omit variables and cannot capture all real-world complexity.
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Can normative statements be proved true or false?
No — they depend on values and opinions, not data alone.
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What is a positive statement in economics?
An objective statement that can be tested and verified or refuted by referring to factual evidence. It describes 'what is, was, or will be'.
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What is a normative statement in economics?
A subjective statement based on a value judgement that expresses an opinion about what 'ought to be'. It cannot be proven or disproven by facts alone.
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What does 'ceteris paribus' mean?
A Latin phrase meaning 'all other things being equal'. It is an assumption used in economic models to isolate the relationship between two variables by holding other factors constant.
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What is the purpose of an economic model?
To simplify complex economic reality in order to explain economic behaviour, analyse relationships between variables, and make predictions about future outcomes.
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Why is the distinction between positive and normative statements important for policy-making?
It separates the objective analysis of a policy's likely consequences (positive) from the subjective debate about whether those consequences are desirable (normative). Effective policy requires both.