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Economic Analysis
From ZuluNotes - Free Leaving Cert Notes
| Economic Analysis | ||
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| Subject: | Economics | |
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| Level | H&O | |
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There are two main methods of Economic Analysis.
- The Inductive Method: This is where a particular example is used to make a general overall statement. E.g. When the price of a pizza rises, John buys less pizza, therefore we can state that in general, when price goes up demand goes down.
- The Deductive Method: This process involves taking a general trend or idea and refining it to a particular statement. For example, a pizza company with several chains around Ireland raises it's prices, and notices that overall demand levels fall. John lives in Ireland, therefore we can assume that if the price of pizza rises, his personal demand will fall.
