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Macroeconomics 8th Edition by David Colander
Edition 8ISBN: 978-0077398088Macroeconomics 8th Edition by David Colander
Edition 8ISBN: 978-0077398088 Exercise 2
Define deduction and give an example of deductive reasoning.
Explanation
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Deduction is a way of thinking in which one constructs a theory based on a set of one or more self-evident principles. Traditional principles are considered to build economic theories. Deduction also considers the rational behavior of people as a base for economic theories.
For example, on the basis of a principle that there is a positive relationship between price and supply, producers increase their supply in the market if the price increases. Producers can maximize their profit by increasing supply when prices go up in the market.
For example, on the basis of a principle that there is a positive relationship between price and supply, producers increase their supply in the market if the price increases. Producers can maximize their profit by increasing supply when prices go up in the market.
Macroeconomics 8th Edition by David Colander
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