1 Introduction to Macroeconomics 17 9 13 Economic Statements 1 Normative Economic Statements This is a matter of opinion For example ethics morality etc It 2 Positive Economic Statements This is a matter of fact For example statistics studies etc Economic statements are primarily of 2 types is subjective Hence it is objective Example of a combined statement If in 1 year we have 600 homicides it is a bad thing P E S N E S Economic statements may also be of the following 2 types 1 Macroeconomic Statements MaS to a large system like the economy it is a MaS a small system like a household it is a MiS 2 Microeconomic Statements MiS Graphs Economic information is conveyed in 4 ways 1 Narrative Talking 2 Tabular Tables 3 Mathematical Equations 4 Graphical Graphs When a reference is made to a variable which is applicable When a reference is made to a variable which is applicable to Types of Graphs Graphs may be linear or curvy Linear graphs are pretty rare It happens when in the relationship both variables increase by a fixed number For example see the table below Income 0 100 200 300 400 500 Consumption 50 100 150 200 250 300 2 The graph will look something like this To determine which is on the X axis and which is on the Y axis we need to know the independent and dependent variable Dependent goes to the Y axis and Independent goes to the X axis Here since income is independent it shall go to the Y axis and consumption shall come on the X axis The exception to the rule is price or cost If price or cost is in the mix it shall always go to the X axis even though it is the independent variable We can see that there is a positive relationship in the graph To find out the slope we can simply divide the vertical change by the horizontal change Slope Vertical Change 50 0 5 Horizontal Change 100 The rate of adaptation of any technology results in a curve shaped S graph This is because the people are wary of adapting it at first Then after a certain point it picks up and there is a massive rise But then again after a certain point the slope reduces because it has reached full or almost full absorption
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