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Evaluating an Economic Claim
A politician claims that a new tax cut they enacted is responsible for a recent surge in the stock market, pointing out that the market began to rise just one week after the law was passed. Using your understanding of the difference between two variables moving together and one variable directly causing a change in another, explain the potential flaw in the politician's reasoning.
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Economics
Economy
Introduction to Macroeconomics Course
Ch.5 Macroeconomic policy: Inflation and unemployment - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
Social Science
Empirical Science
Science
Application in Bloom's Taxonomy
Cognitive Psychology
Psychology
Related
An economic analyst observes that in a particular city, the number of new coffee shops opened per year is strongly and positively associated with the average salary of the city's residents. The analyst concludes that opening more coffee shops will cause the average salary in the city to rise. Which of the following statements best analyzes the analyst's conclusion?
Interpreting Economic Data
An economist observes that cities with higher ice cream sales also tend to have higher crime rates. Based on this strong statistical association, it is valid to conclude that increased ice cream consumption directly leads to an increase in criminal activity.
Evaluating an Economic Claim