Complete the notes below.

Write NO MORE THAN TWO WORDS for each answer.

Complete the notes below.

Write ONE WORD ONLY for each answer.

THE THREE KEY MACROECONOMIC TERMS

UNIT 5 ECONOMIC ANALYSIS (1)

Text 1. The tools of economic analysis.

1. Read through paragraph I quickly and decide which statement expresses the main idea of the paragraph in the best way.

1. Positive and normative economics study different aspects of economy.

2. Positive and normative economics apply different methods of studying economy.

3. Positive and normative economics use different approaches to studying economy.

1. Read paragraphs 3-8 in no more than 4 minutes. Match each paragraph with the sentences A-F below which summarize their content.

A. Argumentative analysis should be applied to test whether the model fits the corresponding facts.

B. Three steps of economic analysis.

C. A false coincidence in facts which seem to be very close on the surface should in the end be ignored.

D. Data deal with quantifying the facts and their links provided by the model.

E. Logical reasoning is needed to prove that the model can be viewed as conforming logically to the facts.

F. A model is a simplified picture of reality, which helps analyze and choose the best way of behavior.

1. Read questions 1-3. Before you answer them, decide in which paragraph (4-7) you will find the answer. Don’t look back at the text at this stage, though you can look back at the summarizing sentences on the margins of the textbook if necessary.

1. How does the author describe the interaction between data and models?

2. What kind of facts can lead to spurious conclusions?

3. What is necessary to do to avoid a factual coincidence?

Note completion. Choose one or two words from paragraphs 4, 5 for each answer.

1. The data or facts (1)_____________ models in two ways.

2. First, the data help us (2) ______________ the relationships to which our theoretical models draw attention.

3. Like all careful scientists, economists must check that their theories (3) ______________the relevant facts.

4. Is this a (4) __________________or the key to a theory of inflation in the UK?

5. The facts alert us to the need to ponder this question, but we can make a decision by recourse to (5) _______________________.