Discuss the following with your partner.

ntro-

Before you read

Discuss the following with your partner.

-» Econometrics is a term that economists use. -* Look at the word: econo + metrics -> What do you think it means?

8? A Vocabulary

Choose the correct word.

Prices usually increase / save from one year to the next.

People work in order to measure / ear» money.

My grandmother's only income / salary is her pension.

Einstein is famous for his theory / analysis -of relativity.

The police search for evidence / variables to help them find the criminal.

If you increase / combine blue with red you get purple.

Government statistics / evidence show that crime is rising.

People save / increase their money in bank accounts.

You can use a ruler to measure / earn the size of things.

A person's income / salary is the money they earn each month from work.

His theory / analysis of the problem is very good.

In experiments, scientists try to find out what makes * variable / evidence change.

An expert in a subject who works and teaches at a university is known as an individual / academic.

SB Reading 1

Econometrics

Economists like to make theories. They theorise about why inflation happens, for example, or what causes unemployment. But theories are not useful if you cannot test them. This is true for all sciences, and the same for economics.

To test a theory, you first need to gather what scientists call empirical evidence. That's evidence that can be measured, like money spent or babies born. When you have collected the evidence, you're ready to do the maths and statistics to test your theory. Economists call their maths econometrics.

Let's take an example. Imagine that you want to find out why some people save more money than others. You may think that this depends on two things: how much money they earn (their income) and how happy they generally are about saving money. We can express your theory as an econometric formula:

Macmillan Guide to Economics Unit 2 9

Дата добавления: 2015-11-04