Week 1

Question 1

Positive Statement?

Answer 1

One of fact, could still be wrong however.

E.g. Paris is the Capital of Germany

Question 2

Normative Statement?

Answer 2

One of preference or opinion.

E.g. Milk chocolate is better than dark.

Question 3

What is an Economic School?

Answer 3

Group of economists who share a belief in a body of economic theory.

Question 4

Neo Classical beliefs?

Answer 4

• This group would favour market solutions to problems rather than government action.
• They believe that competition brings efficiency.
• They accept the price mechanism with its supply and demand theory and the idea of individuals being rational and able to make choices - rational expectations.

Question 5

Emphasis on markets; privatisation; trade union activity and limited government is sometimes known as?

Answer 5

Neoliberalism.

Question 6

Keynesian beliefs?

Answer 6

Economy needs government intervention after an economic shock.

Question 7

Institutionalist beliefs?

Answer 7

Recognise the importance of social, political and economic organisations in determining economic events. Believe varying cultural and historical influences has a big impact.

Question 8

Supply side beliefs?

Answer 8

Believe industry and commerce are enterprisng amd should have as much freedom of action as possible, so taxation should be reduced; the law on trade unions changed to weaken them; government owned industries privatised.

Question 9

Green Economists Beliefs?

Answer 9

Members of this group will often not want too much emphasis put on economic growth which they may see as causing further reductions in the world’s resources; they might advocate taxation on air flights or petrol in order to reduce pollution; they might argue that we should change the way we work to get a better (if “poorer”) work/life balance.