EC120 Chapter Notes - Chapter 1: Dependent And Independent Variables, Equation
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EC120 Full Course Notes
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Normative statements: a statement about what ought to be; it is based on a value judgment. Positive statement: a statement about what actually is, was, or will be; it is not based on a value judgement. Distinguishing what is actually true from what we would like to be true requires distinguishing between positive and normative statements. Positive statements are considered as factual whereas normative statements are opinion based or a suggestion. Variable: any well-defined item, such as the price or quantity of a commodity, that can take on various specific values. Endogenous variable: a variable that is explained within a theory. Sometimes called an induced variable or a dependent variable. Exogenous variable: a variable that is determined outside the theory. Sometimes called an autonomous variable or independent variable. Assumptions: a theory"s assumptions concern motives, directions of causation, and the conditions under which the theory is meant to apply.
