Methods of Study in Economics Essay

This mode is withal called as abstract, analytical and priority method. Under this method, laws atomic number 18 deduced in a logical manner. On the basis of certain(prenominal) fundamental assumptions or evaluate axioms (principles) or truths which have been established and handed down from generation to generation, the needed conclusions are found out. This method is called as abstract since it is based on abstract reasoning and not actual facts. However, actual situation may differ from what deductive logic suggests.For example, it is assumed that the man is rational and on the basis of this it is deduced that he will buy cheap and sell right ones. However, in actual situation this may not happen because of the absence of proper knowledge and market conditions. The principle steps in the accomplish of deriving frugal generalizations through deductive logic are1.perception of the hassle2.defining the technical terms and making the appropriate assumptions 3.deducing hyp othesis and4.testing of hypothesis deduced. by dint of the use of deductive method, many theories and generalizations have been established in economics. It is called as inverse descent between the price and quantity demanded, the direct family relationship between the price and quantity supplied etc. However, this method also suffers from certain handicaps such as (i) assumptions generally turn out to be false or partially true (ii) valid conclusions cannot be drawn in the absence of proper knowledge of the whole situation and (iii) it is dangerous to demand universal validity for the economic generalizations so deduced.Inductive method accord to this method, conclusions are drawn on the basis of collection and analysis of the facts which are relevant to the inquiry. The logic in this case proceeds from the particular to the general. The generalizations are based on observation of individual examples.The principle steps in this method arePerception of the problemCollection, clas sification and analysis of information by using appropriate statistical techniques Finding out the reasons for the relationship established through statistical analysis and to set rules for the verification of the principles. umteen researches in macroeconomics have been obtained through inductive method such as principle of acceleration describing the factors which determine investment in an economy, the nature of enjoyment function describing the relationship between income and consumption etc.Inductive method is increasingly being used on account of the under mentioned facts statistical induction leading to precise, exact and measurable conclusions It underlines the importance of relativity of economic laws and It shows that generalizations are valid only under certain conditions. However, this method suffers from danger of hurried conclusions having being drawn from an insufficient number of facts Difficulties involved in the collection of factsThe fact that observation and ex perimentation have very special application in a science that deals with human activities.Referencehttp//classof1.com/homework-help/economics-homework-help