Business Finance
ECO372 Phoenix Economics Thoughts and Principles Paper

ECO372

University of Phoenix

Question Description

Purpose of Assignment

The purpose of this is assignment is for students to review the basic principles of economics and the concepts of the circular flow model, showing the connectivity of society's economic players and the flow of goods and money within an economy. Students will learn how society allocates its scarce resources and how economists are both scientists and policymakers. Students will define GDP and CPI and how they are calculated.

Assignment Steps

Resources: National Bureau of Economic Research; Principles of Macroeconomics: Ch. 1, 2, 3, 4, 5, 6, and 7

Scenario: Your organization's CEO is concerned that members of the strategic planning committee are not familiar with current economic thought and principles. The CEO has assigned you the task of developing a report to introduce some of these thoughts and principles.

Develop a 1,050-word report to the members of the strategic planning committee explaining the following information:

  • How economists are both scientists and policymakers and what principles society uses to allocate its scarce resources.
  • Using the circular flow model, explain the flow of money and goods in an economy.
  • How the economy coordinates society's independent economic actors.
  • A country's gross domestic product (GDP) and how it is defined and calculated.
  • How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living.

Format the assignment consistent with APA guidelines.

Final Answer

Attached.

Economic Thoughts and Principles - Outline
Economic Thoughts and Principles
A. Economists as Scientists and Policy Makers
B. Principle Society uses to Allocate Scarce Resources
C. Circular Flow Model
D. How the Economy Coordinates Society's Independent Economic Actors
E. Gross Domestic Product
F. Consumer Price Index


Running head: ECONOMICS THOUGHTS AND PRINCIPLES

Economics Thoughts and Principles
Name
Institution

1

ECONOMICS THOUGHTS AND PRINCIPLES
Economics Thoughts and Principles
Economists as Scientists and Policy Makers
Economists are scientists because the nature of their work entails formulation of models
and hypothesis that are subjected to test using data. The data examined are used to make
predictions on various underlying assumptions. The results from the test may not always be
accurate. The data used by economics is used to explain different patterns and how shifts in
factors behind the patterns bring about changes. For instance, data can be used to describe how
the consumption of gasoline changes with changes in gas tax. Such tests are referred to as
positive economics because they are fact based and can undergo testing to be approved or
disapproved. Economists also go further into making recommendations when the changes occur
which is normative economics. Normative economics is opinion based and cannot be approved
or disapproved. For instance, should abortion be legalized? Economists as scientists develop and
tests economic assumptions and theories to in an objective way using scientific methods and
principles to arrive at conclusions (Feigenbaum & Hafer, 2012). As policy makers, economists
take part in formulating poli...

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