Ch. 1 Microeconomics and Macroeconomics, Positive and Normative Economics

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The study of the individual consumer, firm, or market
The study of the entire economy or a major aggregate of the economy
A collection of specific economic units treated as if they were one unit.
Positive Economics
Focuses on facts and cause-and-effect relationships. It includes description, theory development, and theory testing.
Normative Economics
Incorporates value judgements about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal.
Categories: Macroeconomics