Eco. 101—-21-8-2021 (Online Discussion Quiz 2–Methods of Economic Analysis)

Name: Onyelonu Chidire Victory
Reg no: 2020/246205
Department: Combined social sciences(Economics and psychology)
Faculty: Social sciences
Email: victorychidi223@gmail.com

Questions: what are the basic method of analysis used by Economists?
The word ‘economics’ comes from two Greek words, ‘eco’ meaning home and ‘nomos’ meaning accounts. The subject has developed from being about how to keep the family accounts into the wide-ranging subject of today.
Economics has grown in scope, very slowly up to the 19th century, but at an accelerating rate ever since. Today it has many of the features of a language. You may already have studied economics and there is the danger that the language that you learnt has changed, so be careful! 
Economics is the study of scarcity and its implications for the use of resources, production of goods and services, growth of production and welfare over time, and a great variety of other complex issues of vital concern to society. And there are methods of analysis Economics which are:
(1). Inductive reasoning: This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method done through observation, formulating hypothesis, generalizing principles and verifying against actual fact. One of its advantages is that it is more realistic and reliable. And one of its disadvantages is that it’s a time consuming process and expensive.

(2). Deductive reasoning: This is also called a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning through: observation, of a task, making the hypothesis, testing the hypothesis using more observations, etc.This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws. One of the advantages of these method is that for economists as it focuses upon economic reasoning which is of paramount importance. and one of its disadvantages is that it’s logical fallacy.
This implies that the two methods or reasoning differs methodologically.

Name: RAWLINGS OTSONU
Jamb Reg No. 29752699EF
Department: Economics
Faculty: Social Sciences
Assignment Question: Meaning of Economics and Behavioural Economics

Responses: The meaning of Economics, a derivative of the Greek word ‘economy’ has been succinctly defined by different scholars based on their own understanding of the subject. In line with the word “economy”. Economy is a Greek word’oikovouoc meaning One who manages a household”). It is a composite word derived from oikoc, (house) and veuw (“manage, distribute”) by the way of oikovouia, meaning household Management. And economy consist of Economic system in a certain region, comprising the production, distribution or trading and consumption of the limited goods and services in that region or country. Therefore, economy is the total sum of product and services transactions of value between two or more economic agent in a region, whether individual(s), organization or States.
Economics as a term can be defined as follows:
The classical economist, such as Adam Smith put Economics to be”the study of production, distribution and growth of wealth in society”. This definition of economics is based on the aspect of wealth and concrete economic activities that are not intangible. They emphasized basically on the physical aspect of human activities, leading to utilisation of physical resources in the society, especially in actual production, distribution and growth in a competitive economy.
That is why of of the classical economists in the person of Adam Smith defined Economics as “an inquiry into the nature and causes of the wealth of Nations”. Another school of thought, known as the Marxist understand economics to be based on the aspect of labour influencing the development of the economy and its productivity level. Their understanding level of the subject (economics) encompasses only the aspect of labour population and their effects.
The above points lay emphasis economics in micro aspect, not macro. For that reason, the social scientists postulated that economics studies the way in which societies solve the fundamental problems of reconciling unlimited desires of individuals with scarce resources, likely to be affected by numerous alternative uses. This is why I would like to adopt the definition of economics by the great economist, Professor Lord Robinson). He defined Economics as a science, which study human behaviour, as a relationship between the ends and scarce means, which have alternative. His definition is of economics is all encompassing and it covers all the Scopes and fields of economics, being macro micro.
His definition of economics is generally recognized and used by young learners.

Behavioural Economics:
This according to a scholar Atma Jaya Rosdiana Sijabat of a Catholic University in Indonesia quoted that in the traditional economics approach, ‘an individual’s decision reflect that individual’s best interests and made rationally ‘. For that, she viewed that Behavioural Economics as a field of study in Economics that integrates economics and psychology in analysing human behaviour, which is important for explaining why individuals’ decisions and behaviour may not reflect their best interests”. According to findings, Behavioural Economics has advantage for its power to explain individual’s psychological State (State of the mind) in decision making process, in both individual, group of individuals and institutions.
Some technical aspects of the behavioural economics are: pricing process and opportunity cost.
According to the view of Brzezicka and Wisniewski in 2013, Behavioural Economics is an experimental science, as it is based on experiment that combine economic deduction and psychological induction, thereby creating a complementary means of explaining human decisions.
Another scholar, known as Beenheim and Rangel in 2007 opined that behavioural economics combines the theoretical concepts with those of the state of mind, thereby allowing it to develop various models for explaining the difficult issues of warfare evaluation, which means that with the help of that, scholars would be able to use it in tackling technical problems involving both psychic and physical economic challenges because it offers theoritical and methodological means of understanding human behaviour (physical exhibition or response to stimulus or stimuli); by combining the principles of Behavioural science and micro-economics in line with the view of Kaplan et al in 2018.
MC Mahon also used the same sense to explain behavioural economics in 2015 when he said that: “The fundamental assumption of economic resources distribution is that individuals are rational beings (rational homo oeconomus, economics humans) when making economic decisions.
Also, Alm and Bordeaux in 2013 supported that stand, he reported that that was why individuals are rational in their views and decision making processes.
Reference from:
1. Acheson, J. D. Lynch, 2017.; Implications of behavioural economics for tax policy. Retrieve from http://igees'gov.ie/wp-content/uploads/2014/01/Behavioural-economics-and-Tax.pdf%5BAccessedMarch10, 2018].
2. Alm, J., 2010. Testing behavioural public economics theories in the Laboratory. National Tax Journal, 63:635-658.view@googlescholar|View at publisher, etc.

NAME: Nweke Dominic Ede
Reg No:2018/243563
Dept: Public Administration and Local Government
Email Address: domnweke81@gmail.com

METHODS OF ECONOMICS ANALYSIS
Like any other science, Economics adopts two important methods in its investigations and formulation of laws and principles. The two methods are:

Deductive Methods and Inductive Methods.

Deductive Method of Economics Analysis is known as the analytical abstract a priori method. Here we start with certain formal data and assumptions. Then by logical reasoning we arrive at certain conclusions. We start with undisputed fundamental facts and after adding some assumptions we build up a theory. For instance, it is assumed that businessmen aim at maximum profit. It follows from this that businessmen buy the materials in the cheapest market and sell it in the dearest market.

In Deductive method of Economic Analysis we proceed from the general to the particular. This is also known as an hypothetical method for some of the assumptions may not correspond to actual facts, but very near actual facts which may be used as premise for starting, reasoning and drawing conclusions. In economics we start with very simple premises and work up gradually or more and more complex hypotheses.

A complete form of deductive method consists of three stages, viz.,
(i)Observation;
(ii) Deductive reasoning and
(iii) Instance and testing by means of further observations.
Deductive reasoning provides us with hypotheses or generalizations. If the hypotheses are tested and verified with relevance to facts, we have valid economic laws.

Advantages of Deductive Method of Economic Analysis:

1. Deductive method is exceedingly simple. For example, the law that the utility derived by an individual from a commodity goes on diminishing with every successive addition is a self-evident truth from which we may draw many logical conclusions, viz., larger the stock of money, the lower shall be the utility of money; rich persons have lesser marginal utility of money than the poor people; so taxes should not be levied on proportional basis. If taxes are levied proportionately, the sacrifice of the poor will be larger than the rich. This is against the Canon of equity, etc. Thus the principle of progressive taxation is derived from the law of diminishing utility through deductive reasoning.

2. Deductive method obviates the necessity of experimentation. Economics being a social science, experimentation may not be available as in the case of physics or chemistry. So, the next best alternative to experiment is deductive reasoning. According to Boulding this method of deductive reasoning is the method of intellectual experiment.

3. The deductive method results in accuracy and exactness in generalization, because of logical reasoning. The method gives a very high standard of precision in abstract economic reasoning.

Disadvantages of Deductive Method of Economic Analysis:

1. Deduction is based mainly on assumptions which are perfectly valid. If assumptions are wrong, generalizations made on the basis of wrong assumptions will be imperfect and invalid. All economic laws are based on too many assumptions where there are more scope for committing errors through wrong hypotheses.

2. In deduction there is too much of abstraction and economists by means of their intellectual exercises produce only “intellectual toys” having little connection with reality.

3. Deductive generalizations started on wrong premises will be dangerous when such generalization claim universal validity. Then such faulty generalizations are made use of in framing government policies, the results would be nothing but disastrous. For example, J.B.Say, claimed universal validity for his ‘Law of Markets’ in which he maintained that supply creates its own demand and there will not be over-production in the market. But this celebrated ‘Law of Market’ was torn to pieces when critics proved that Say’s Law was wrong and overproduction would be possible.

(2) Inductive Method of Economic Analysis

In this method, economists proceed from a practical angle to problems of science to reduce the gulf between theory and practice. Induction is done by two forms, viz. experimentation and statistical form. Facts are collected first, arranged and conclusions are drawn. Then these general conclusions are further verified with reference to actual facts.

The inductive method is generally associated with the statistical form of inductions. The statistical approach has a larger field in economic investigations than the method of experimentation. Further, the method of statistical induction is indispensable for the formulation of economic policy. Malthus presented his famous theory of population only after studying the facts of population in various countries; He then used statistics to support his theory. Similarly Engel, the German statistician employed inductive method and used statistics to formulate his law of consumption.

Advantages of Inductive Method of Economic Analysis:

1. It is highly practical add realistic as it describes things as they are.

2. It is helpful in verifying the conclusions of the deductive method.

3. Economic laws under this method are not universal but valid only under certain conditions.

Disadvantages of Inductive Method of Economic Analysis:

1. When the investigators lack a balanced judgement there is the risk of drawing hurried conclusions based on inadequate and irrelevant facts and data.

2. Collection of facts in the inductive process is a highly complex and complicated job warranting extraordinary understanding to alienate economic from non-economic factors.

3. Mere induction alone will not deliver goods unless it is supplemented by means of deductive reasoning. Without deduction, the inductive method would result in producing only a mass of unrelated and unconnected facts.

Deductive or Inductive?
From the above discussion, we can infer that there is no point in pleading one method against the other. The two methods have to be made use of or blended to achieve the required objective. The two methods, deductive and inductive, are not competitive, but complementary in nature helping the investigator.

the methods of economics analysis
inductive method is generally associated with the statistical form of inductions .the statisfical approach has lager field in economic investigations than the methods of experiemental futher. the methods of statistical inductions is indispensible for the formulations of economic policy .mathus presented the famous theory of populations only after studing the facts of populaton in various countries ,he then used statistics to support the theory

2,Deductive method is know as the analytical abstract a piror method .with certain formula ,data and assumptions then by logical reasoning we arrive at certain conclusions .we start with indisputed fundamental facts and after adding some assumption we build up a theory .for instance it is assumed that bussinessmen aim at maximum profit .it follow from this that bussiness men buy the materials in the cheapest market and sell in the dearest market

Name: Abraham Chibuike Sunday
Reg no:20033827AF

What are the basic method of analysis used by economist.

First before I stated them let me quickly define economic analysis.
Economic analysis involves the formulations of laws and generalization through two method.

Now heat are the basic method of analysis used by economists.

1) Deductive method.
2) Inductive method.

1) Deductive method: Now this method can also be called priori reasoning.It is involves the observation of issues,making and building hypothesis using more observation and if adopted then it becomes an economic law. This method is easy as only simple deduction is necessary and boost economic reasoning.

2). Inductive method: This type of reasoning flows from information, facts,and theory.In this type we first gather facts,information and then move towards bringing proves using economic theory,information and facts.

Three ways of formulating economics principles and theories.

1) observation
2) Econometric method or statistical.
3) experimentation.

Name Abraham Chibuike Sunday
Course Public administration

Economics analysis involves deploying various methods to analyze the economy by economists.
The basic methods of economic analysis involves two methods;
1.deductive method
2. Inductive method
The two methods are based on generalization and theory.
DEDUCTIVE METHOD.
The deductive method is also called analytical or prior method.It involves deriving conclusions from known accepted truth, takes them and applies them to draw conclusion.Take for instance, if I accept the general proposition that Nigerians are lawless. I can conclusively say that we are uncivilized. We see from above illustration that it moved from general to particular. In deductive method, conclusions cannot of your inference cannot be false given that the premises are true.
GENERALIZATION STEPS OF DEDUCTIVE METHOD.
1. Perception of the problem :
The analyst must have clear and precise idea of the problem to be inquired into.
2. Find precisely the technical terms, define them and make assumptions.
3. Deduce hypothesis :
From the assumptions made, hypothesis are deduced. The hypothesis could be null or unnull hypothesis.
4. Test the hypothesis ;
Before generalization or theories are established, hypothesis should be verified through direct observation of events and through statistical methods.
MERITS OF DEDUCTIVE METHOD
1. The deductive method is near reality, less expensive and time consuming
2. The method is simple because it is analytical
3. The method can help to derive economic theories
DEMERITS OF DEDUCTIVE METHOD
1.It is highly abstract, requires alot of care to avoid faulty economic reasoning
2. Deduction analysis is not applicable universally.
The imperfections and incorrect assumptions associated with this method that leads to faulty conclusions prompted the classical and neo- classical economists to look for alternative method of economic analysis thus the inductive method.

THE INDUCTIVE METHOD.
The inductive method also called empirical method was adopted by Historical School of Economists in a bid to improve faulty assumptions associated with the deductive method. It derives generalization on the basics of experiments, observation and statistical methods. It involves making inferences based on observed patterns or simple repetition, Often used in reference to predict about what will happen or does happen, based upon what has happened. For instance,we observe all UNN students during during rainy season. We find that 90% uses umbrella. Out of the remaining 10%, 6% wear rain coat despite that it is expensive while 4% doesn’t have umbrella nor rain coat. From the above illustration,we can easily draw conclusion that UNN students uses umbrella during rainy season unless they are devoid of common sense.
MERITS OF INDUCTIVE METHOD.
1. It’s based on facts and at such is reliable and realistic
2. Inductive method is dynamic
The changing economic phenomenon are analysed and on the basics of collected data,solution and conclusions are drawn.
3. Inductive method helps in future investigation
DEMERITS OF INDUCTIVE METHOD
1.It is time consuming and expensive
2. Data collection is not an easy task
CONCLUSION
The two methods discussed above have weakness and cannot be exclusively relied on. Modern economists believe that both methods are complimentary
They are partners and not rivals. Alfred Marshall said that”inductive and deductive methods are both needed for scientific thought,as the right and left foot needed for walking”.

NAME:ADAMGBE IORWUESE AMOS
DEPT: ECONOMICS
MATRIC NO.2020/242575
COURSE CODE: ECO 101

METHODS OF ECONOMIC ANALYSIS
(1) THE DEDUCTIVE METHOD: Deductive method is essentially a top-down approach which moves from the more general to the more specific. In other words, we start with a general notion or theory, which we then narrow down to specific hypotheses, which are then tested.
steps involved in Deductive methods are;
(1)perception of the problem
(2)postulates/making assumptions
(3)deduction of hypothesis
(4)Testing the hypothesis
INDUCTIVE METHOD:
The inductive method is more of a bottom-up approach, moving from the more specific to the more general, in which we make specific observations, detect patterns, formulate hypotheses and draw conclusions.
steps involved in inductive method includes;
(1) observation
(2) experience
(3) econometrics methods

Name: Chukwu Augustina Chicheta
Matric no: 2020/243289
Department: Public Administration and Local Government
Email: chukwuaugustinac98@gmail.com

The basic method of analysis used by economist are Deductive method and Inductive method.

1. Deductive method of reasoning is a process of reasoning from one or more statements to reach conclusions.
The deductive method also known as abstract, analytical represent abstract approach to the derivation of economic generalization and theories.
The steps in the process of deriving economic generalization through deductive method are;
i. Perception of the problem.
ii. definition of technical terms and making os assumption.
iii. deducing hypothesis through logical deduction.
iv. Verification of hypothesis.

2. Inductive method of analysis is a method of reasoning in which statements are viewed as supplying some evidence, but not full assurance, of the the the conclusion.
In inductive method of analysis, one’s experiences and observations, including what’s learned from others, ara synthesized to come up with a general truth.
Here are the steps in developing economic theories through inductive method are:
i. Identifying the problem.
ii. defining the technical terms and variables related to the problem.
iii. collection of data about the variables related to the problem.
iv. construction of economic theories etc.

NAME: CHIDUMEBI ONYEJE
REG NUMBER: 20683830DF
DEPARTMENT: ECONOMICS

Methods of Economics Analysis:

Like any other science, Economics adopts two important methods in its investigations and formulation of two laws and principles. The two methods are:
1. Deductive method
2. Inductive method

1. Deductive method of economic analysis: Deductive method is known as the analytical abstract, a prior method. Here we start with certain formal data and assumptions, then by logical reasoning we arrive at certain conclusions. We start with undisputed fundamental facts and after adding some assumptions we build up theory. For instance, it is assumed that business men aim at maximum profit. It follows from this that business men buy the materials in the cheapest market and sell it in the nearest market.
In deductive method of economic analysis we proved from the general to the particular. This is also known as an hypothetical method for some of the assumptions may not correspond to actual facts which may be used as premise for starting, reasoning and drawing conclusions

2. Inductive method of economic analysis: In this method, economists proceed from a practical angle to problem of science to reduce the gulf between theory and practice. Induction is done by two forms, viz ; experimentation and statistical form. Facts are collected first, arranged and conclusions are drawn. Then these general conclusions are further verified with reference to actual facts.
The inductive method is generally associated with the statistical form of inductions. The statistical approach has a larger field in economic investigations than the method of statistical induction in indispensable for the formulation of economic policy.

METHOD OF ECONOMICS ANALYSIS
We have two main method of economic analysis which includes
1.Deductive and
2.Inductive reasoning/method
Deductive method is representation of an approach to the derivation of economic analysis to a certain conclusion.it also known as analytical, abstract and prior method which derives conclusion from the premises through the process of logical reasoning and a technical way of assumption.
Advantage of deductive method/reasoning
*It very easy to operate;it’s less expensive
*The use of mathematical method in Deductive logic helps the economist to introduce accurate estimate in economic principles and theory
*It also can draw conclusion with out detailed collection of data
Disadvantage of deductive method
*In Deductive reasoning is there is much of abstraction and economist through their intellectual exercises relating to reality.
INDUCTIVE REASONING also known as empirical method derives economic analysis through the basis of theory and practice.it is also associated with statistical form of induction where facts are first collected and conclusion are drawn which later turn to actual facts.
Merit of inductive method
*Inductive method of economic analysis is realistic and practical
*It helps in verifying the conclusion of the deductive method
Demerit of inductive method
*Inductive method has its demerit which includes; drawing conclusion from insufficient data to obtain generalizations of economic analysis.

METHOD OF ECONOMICS ANALYSIS
the two main method of economic analysis
Which are
1.Deductive and
2.Inductive Method/Reasoning
DEDUCTIVE REASONING: this is a representation of an approach to the derivation of economic analysis to a certain conclusion.it is also known as abstract, analytical and prior method.it draw conclusion from the premises through the process of logical reasoning and technical way of assumption.
I deductive reasoning has its merit and demerit which includes ,
Advantage of deductive method
1.its simple cause it derives important economic analysis with out detailed collection of data
2.the use of mathematical method in deductive logic helps the economist to introduce accurate estimate in economic principles and theory
Disadvantge of deductive method
*In deductive reasoning derivation of economic hypothesis and conclusion through deductive reasoning, assumption leads to a bad role
INDUCTIVE REASONING
Inductive method of economic analysis is also known as empirical method which derives economic analysis through the basis of theory and practical.it is generally associated with statistical form of induction where facts are first collected and will turn into actual facts later.
Inductive method has three ways which can be used for derivation of economic analysis which are
1.Experiment
2.Observation and
3.Econometric method
Merit of inductive method/reasoning
* It is realistic and practical
* It helps in verifying the conclusion of the deductive method
Demerit of inductive method
*It draws conclusion from insufficient data to obtain generalization of economic analysis.

METHOD OF ECONOMICS ANALYSIS
In economics we have two main method of economic analysis which are
1.deductive and
2.inductive method or Reasoning.
*DEDUCTIVE REASONING:this is a presentation of approach through the derivation of economic analysis to a certain conclusion.deductive logic also Know as analytical, abstract and prior method draws conclusion from the premises through the process of logical reasoning and a technical way of assumption.it also has its demerit and merit which are;
Advantage of deductive method
*It is simple because through deductive reasoning important economic theories can be drawn with out detailed collection of data.
*The use of mathematical method in deductive logic helps the economist to introduce accurate estimate in economic principles and theory.
Disadvantage of deductive method
*The derivation of economic hypothesis and conclusion through deductive reasoning, assumption leads to bad role.
INDUCTIVE REASONING
Inductive method also known as empirical method derives economic conclusion through the basis of theory and practice.inductive reasoning is generally associated with statistical form of induction where facts are first collected and conclusion are drawn which later turn to actual facts.
Inductive method has three ways which can be used for derivation of economic principles which are
*Experiment
*Observation and
*Econometric method.
Advantage of inductive method
*Inductive reasoning is realistic and practical.
*it help in verifying the conclusion of the deductive method
Disadvantage of inductive method
Inductive reasoning has its own disadvantage which is drawing conclusion from insufficient data to obtain generalization.

Reg no__20683659DF
Department__public Administration and Local Government

Two methods of economics analysis are:
Deductive and inductive method..
1.DEDUCTIVE METHOD___This is also called a priori reasoning,it will start from unchallenged elementary or rudimentary assumptions (fact and then arrive at conclusions (build a hypothesis or theory) Using logical analysis or our own analytical abilities.In this kind of reasoning will go from general to specific..

THE STAGES INDUCTIVE method are:
a.. Observation of a fact and issues
b.. Making the hypothesis, Testing the hypothesis using more observation

__Advantage of deductive method is _
It is a simple method,it doesn’t involve the use of any complex software analysis

2 ..INDUCTIVE METHOD
This type of reasoning flows from fact to theory.first,it will collect information and facts and then move towards providing evidence using economic theory and facts ..This methods formulates principles using the observations, experimentation, statistical methods.
ADVANTAGE of inductive method
1.Since it is based on fact,it is more realistic and reliable.
DISADVANTAGE of inductive method
1.it is a time consuming process and expensive as well.

NAME:UGOCHUKWU DAVID PRECIOUS
DEPARTMENT:PURE AND INDUSTRIAL CHEMISTRY
FACULTY:PHYSICAL SCIENCE
REG NO:2019/250069
WHAT IS THE BASIC METHODS OF
ANALYSIS USED BY

This process actually involves two basic methods which are Deductive and inductive.

THE DEDUCTIVE METHOD
This is method can also be referred to as a priori reasoning. We start from unchallenged elementary assumptions and then arrive at conclusions i.e (build a hypothesis or theory) using logical analysis . In this kind of reasoning, we have to go from general to specific.
The stages in deductive reasoning includes:
* Observation of a task
* Making the hypothesis
* Testing the hypothesis using more observations.
This reasoning actually gives us a hypothesis and if this hypothesis gets verified we will get a general economic principles or laws.

ADVANTAGES OF A DEDUCTIVE
METHOD
* It is a simple method, which doesn’t involve the use of any complex software analysis.
* Simple deductive logic is required.
* This method is really important for economists as it focuses upon economic reasoning which is importance.

THE DISADVANTAGES OF AN
DEDUCTIVE
METHOD
This method of reasoning will start from assumptions, thus, if the assumptions happen to be logically flawed then the whole process becomes faulty which leads to wrong conclusions.

INDUCTIVE METHOD
This kind of reasoning flows from facts to theory. We have to collect informations and then move towards providing evidence using economic theory and facts.
This method formulates principles using the sub-methods which are:
*Observations
*Experimentations
*Statistical methods.

Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method includes:
* Observation
* Formulation of a hypothesis
* Generalizing principles
* Verifying against actual facts.

THE ADVANTAGES OF AN INDUCTIVE METHOD
* Since this method is based on facts it is more realistic.
* Using the statistical methods and experimentations makes the process more scientific, thus.
* Since the economic environment is dynamic,relying upon a more scientific method will always helps in reaching logical conclusions.

THE DISADVANTAGES OF AN INDUCTIVE
METHOD
* The data that is been used is insufficient and faulty it would lead to faulty conclusions, thereby making the hypothesis less reliable.
* It is a time-consuming process.
* The collection of all the data is not an easy job.
* It varies from person to person. As to how they collect the data.

METHODS OF ECONOMIC ANALYSIS
There are basically two methods of economic analysis
1. Deductive method
2. Inductive method
EXPLANATION
Deductive Method
The deductive Method is also called abstract, analytical or a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific.

The stages in deductive reasoning are:
Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

Advantages of Deductive Method
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.

Disadvantages of Deductive Method
In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

Inductive Method
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method
formulates principles using the sub-methods- Observations, Experimentations, Statistical methods.
Data is collected about a particular economic theory and then conclusions are drawn.

The stages in this method are:
Observation
Formulation of a hypothesis
Generalizing principles
Verifying against actual facts.

Advantages of Inductive Method
Since it is based on facts it is more realistic and reliable.
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.

Disadvantages of Inductive Method
If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable.
It is a time-consuming process and thus expensive as well.
The collection of all the data is not an easy job and varies from person to person as to how they collect data.

Economic Analysis
We have two methods of economic analysis
1.) Deductive method
2.) Inductive method
Deductive method is starting with undisputed fundamental facts and after adding some assumptions it builds up into a theory. It is also called Hypothesis.

Inductive method is based on experiences and observations to derive economic generalizations. This type of reasoning flows from facts to theory. First, we collect information and facts and then move toward providing evidence using economic theory and facts.

The basic economic method are
(1) Deductive and Inductive method
DEDUCTIVE METHOD
In this kind of method, we go from general to specific. The stages in deductive reasoning are:

Observation of a task
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

ADVANTAGE OF DEDUCTIVE METHOD
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.

DISADVANTAGES OF DEDUCTIVE METHOD
In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

INDUCTIVE METHOD
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods. Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method are:
Observation
Formulation of a hypothesis
Generalizing principles
Verifying against actual facts.

ADVANTAGES OF INDUCTIVE METHOD
Since it is based on facts it is more realistic and reliable.
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.

DEMERIT OF INDUCTIVE METHOD
(1)If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable.

(2)it is a time-consuming process and thus expensive as well.
The collection of all the data is not an easy job and varies from person to person. As to how they collect data.

Name:Ossai Benita Toochukwu
Reg no:2019/245534
Dept:Pure and Industrial Chemistry
Email:ossaibenita@gmail.com
METHODS OF ECONOMIC ANALYSIS
The generalisations of economics like the laws of other sciences, state cause and effect relation­ships between variables and describe those economic hypotheses which have been found consistent with facts or, in other words, have been found to be true by empirical evidence. But a distinction may be drawn between a generalisation (law) and a theory.
Some of the most important methods of economic analysis are as follows: 1. Deductive Method 2. Inductive Method
Deductive method:Deduction Means reasoning or inference from the general to the particular or from the universal to the individual. The deductive method derives new conclusions from fundamental assumptions or from truth established by other methods. It involves the process of reasoning from certain laws or principles, which are assumed to be true, to the analysis of facts.
Then inferences are drawn which are verified against observed facts. Bacon described deduction as a “descending process” in which we proceed from a general principle to its consequences. Mill characterised it as a priori method, while others called it abstract and analytical.
Deduction involves four steps: (1) Selecting the problem. (2) The formulation of assumptions on the basis of which the problem is to be explored. (3) The formulation of hypothesis through the process of logical reasoning whereby inferences are drawn. (4) Verifying the hypothesis.
Inductive method:The inductive method which is also called empirical method derives economic generalisations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisations which follow from the observations collected.
But, it is worth mentioning that the number of observations has to be large if it can yield a valid economic generalisation. One should not generalise on the basis of a very few observations. There are three ways which can be used for deriving economic principles and theories.
They are:(a) Experimentation,(b) observations,(c) statistical or econometric method.

The simple strategies of monetary analysis used by economists are the Deductive technique and the Inductive method. Economic
generalizations describe the laws or statements of tendencies in numerous branches of economics, along with production, intake, alternate, and distribution of income. In the view of Robbins, economic generalizations or legal guidelines are statements of uniformity which describe human conduct within the allocation of scarce resources between alternative ends.
The generalizations of economics like the laws of different sciences, kingdoms, cause and impact relationships between variables and describe those financial hypotheses which have been found consistent with records or, in other words, have been located to be true by using empirical evidence. But a distinction may be drawn between a generalization (regulation) and a concept. 
1. Deductive method of monetary evaluation:
The deductive approach is also called the abstract, analytical, and a priori approach, and represents a summary method for the derivation of financial generalizations and theories.
The essential steps in the manner of deriving financial generalizations through deductive common sense are:
(a) belief of the problem:
In any scientific enquiry, the analyst or theorist has to have a clean idea of the problem to be enquired into. He must recognise the enormous variables concerning whose conduct and relationships he wants to derive generalizations. The notion of trouble is by no means an easy task.
(b) Definition of Technical terms and Making of Assumptions:
The next step within the system of deriving economic generalizations is to outline exactly and unambiguously the various technical phrases for use within the evaluation, in addition to the country without doubt, the assumptions he makes to derive generalizations.
Assumptions may be behavioral, referring to the behavior of the monetary variables, or they may be technological, referring to the kingdom of generation and the issue of endowments. The crucial assumptions are made on the basis of observations or introspection.
(c) Deducing Hypotheses via Logical Deduction:
The next step in deriving generalizations through deductive logic is deducing hypotheses from the assumptions or premises taken. A hypothesis describes dating between elements affecting a phenomenon; it establishes the motive and effect of dating among the variables having a bearing on the phenomenon.
Then, through logical technique, a hypothesis is deduced from the assumptions made. This logical reasoning may be accomplished verbally or it is able to be carried out in symbolic phrases through the usage of what’s known as symbolic logic.
The geometric or picture technique is likewise typically hired to deduce hypotheses about the connection between elements. Except, the procedure of logical deduction can be completed with the help of greater formal mathematics.
(d) testing or Verification of Hypotheses:
Hypotheses acquired above need to be demonstrated earlier than they may be set up as generalizations or principles of economics. For the verification of hypotheses, economists can not conduct controlled experiments due to the fact that they should find out the unifor­mities in the conduct styles of men.
We can’t do experiments with guys below managed conditions, consisting of in laboratories, as physical scientists do experiments with inanimate gadgets of nature and biologists do those with animals and vegetation. Consequently, economists have to depend on uncontrolled experience and observations.
The statistics regarding uncontrolled enjoyment of the behavior styles regarding variables about man and the economic system are quite amply available. The reliance by economists on uncontrolled experiences, however, does increase the wide variety of observations required to verify the hypotheses or to establish the generalizations.
deserves and merits of deductive technique:
With the aid of rigorous mathematical judgment, monetary theories can be developed through the system of deduction, which can correctly provide an explanation for economic phenomena. Secondly, via deductive logic, useful monetary theories can be derived without the tenuous and distinct collection and analysis of data which might be required underneath the inductive technique. Therefore
, in comparison to inductive techniques, deduction is much less time-ingesting and less expensive. Thirdly, in view of the restricted scope for managed experimentation in economics, the approach of deduction is an extremely useful technique for building economic theories. This is due to the fact that several forces act simultaneously on an economic phenomenon and it isn’t viable to remove a number of these with the aid of a managed experiment.
This suggests the vital significance of deductive good judgment for building up monetary principles or theories. Fourthly, the usage of sophisticated mathematical techniques within the deductive approach permits economists to introduce accuracy and exactness into economic standards and theories. Regardless
of the above-cited merits, the shortcomings of the deductive approach should now not be unnoticed. The usage of the deductive method in deriving financial generalizations requires using a high-level competence in logic and theoretical abstraction. Similarly
, a great demerit of the deductive technique is that with it, highly state-of-the-art theoretical models based totally on surprisingly unrealistic assumptions may be evolved which do not have any operational importance. Indeed, such highly beside the point analytical fashions with little empirical content and incapable of being used for coverage systems have in truth been evolved by economists. Such fashions are not any more than mere “highbrow toys”. If economics is to function as a device for social betterment, the building of such theoretical fashions having no operational use ought to be averted. Finally
, in the derivation of financial hypotheses and conclusions via deductive common sense, assumptions play a vital function. If the assumptions made are such that when on doing away with them, economic speculation based totally on them is refuted, then the making of these assumptions isn’t legitimate. Hence
, a person who uses a deductive approach should usually keep in mind to what extent the validity of generalizations derived depends on the assumptions made. As an instance, Keynesian macroeconomic analysis is based totally upon the assumption of a melancholy-ridden capitalist financial system with a variety of excess effective capabilities. Consequently
, a fine harm has been done in making use of the Keynesian theories in the context of growing countries like ours in which the assumptions made by using Keynes do no longer hold good. Consequently, mere “deductive arm-chair evaluation” should be avoided, if the clinical persona of economics is to be maintained.
2. Inductive method of economic analysis
The inductive technique, which is also called the empirical approach, derives economic generalizations on the basis of experience and observations. In this technique, precise facts are collected in regards to a positive economic phenomenon and effort is then made to arrive at sure generalizations which follow from the observations accumulated. However
, it’s really worth citing that the variety of observations has to be huge if it may yield a valid economic generalization. One must not generalize on the premise of a few observations. There are three approaches which may be used for deriving financial principles and theories.
(a) Experimentation,
(b) observations,
(c) statistical or econometric methods.
As has been cited above, experimentation, that is, the use of contrived experiments, is of restrained applicability in economics. First, in contrast to natural sciences, which can be concerned with studying the behavior of both inanimate objects or obedient animals, inclusive of rats and rabbits under the influence of chloroform, economics deals with the behavior of man, who’s quite fickle, wayward, and unmanageable. Except
, man can not tolerate the idea of being experimented upon, either individually or collectively. Secondly, a monetary phenomenon is the result of a multiplicity of factors and reasons performing and interacting with each other. Consequently
, financial phenomena no longer repeat themselves within an equal uniform pattern. Numerous elements appearing in a monetary phenomenon ‘disturb’ it and make its precise repetition unlikely. For that reason, compared with herbal phenomena, financial phenomena are less uniform in pattern, much less repetitive and more variable.
Thirdly, economists study the financial phenomena wherein corporations, along with employees’ associations, alternate unions, farming, political events with their distinctive ideologies, and sports make it tough to conduct controlled experiments in the economic world. However, in spite of those problems, experimental methods can be utilized in some fields. As
an example, experiments have been conducted to find out which regulation of production is valid. That is, whether or not regulation of diminishing returns, the law of consistent returns, or regulation of increasing returns operate within the real international. Except, public undertakings or massive commercial corporations often attempt to check the impact of the adjustments on the fees on their products at the call for it and accordingly find out the call for elastic­ity of their merchandise.
various Steps in the Inductive method: Diverse
steps are gone through in growing monetary theories through an inductive approach. Step one, as in the deductive technique, is to perceive the problem. The second step is defining technical phrases and variables associated with the trouble. It
is the next step that is unusual for the inductive approach, particularly, the gathering of facts about the variables related to the trouble and doing some preliminary consideration of the viable practical relationships between the applicable variables. The
following important step in the production of monetary theories in this approach is the processing of statistics collected and locating out what family members between the variables surely maintain good. From this, a principle was developed which can be subtle and examined through statistical methods. As
soon as the idea has evolved, you may make predictions on its foundation, as is executed in the deductive technique. If predictions of concepts are in settlement with the facts and actual behavior of the economy, then a new dependable theory has evolved. If a brand new idea explains “how matters work” better than the prevailing ones, it replaces them.
assessment of Inductive technique:
As has been explained above, observations of information through series of specific records and the usage of statistical methods to arrive at monetary generalizations setting up relationships between facts are being increasingly made. A
number of recent research in the area of macroeconomics, consisting of the nature of intake feature describing the relationship between income and consumption, and the principle of acceleration describing the factors which determine investment within the economic system, have been acquired via the use of an inductive approach.
The inductive approach has some other issues in that there is a high-quality risk of conclusions being drawn from inadequate statistics. To achieve generalizations via inductive technique, one must take care that a sufficient number of observations or statistics have been taken under consideration. Except
, the gathering of information itself is likewise no longer a clean venture. And a researcher who desires to use the inductive method to arrive at generalizations must have proper information about statistical techniques. That is, he should understand the art of accumulating, processing, and inter­preting records. It’s apparent that compared with the deductive technique, the inductive approach is time-eating and expensive.

ASSIGNMENT ON ECO 101
NAME: ODO PHILOMINA CHINASA
REG NO: 29803740BA
DEPT: EDUCATION AND ECONOMICS
Email address: philominachinasa54@gmail.com

The basic methods of analysis used by economists are:

1. DEDUCTIVE METHOD
2. INDUCTIVE METHOD

1. Deductive method which is also called a priori reasoning starts from unchallenged elementary or rudimentary assumptions or facts and then arrives at conclusions. It builds a hypothesis or theory using logical analysis or their own analytical abilities. In this kind of reasoning, economists start from general to specific.
Economists have different stages in deductive reasoning.
They includes;
Observation of task / issue; making the hypothesis; treating the hypothesis using more observation. This reasoning gives economists a hypothesis and if this hypothesis gets verified, they generate economic principles or laws.
Moreover, deductive method is a simple method, it does not involve the use of any complex software analysis. It only required simple deductive logic.
Again, deductive method is important for economists as it focuses upon economic reasoning which is of paramount importance.
2. Inductive method: inductive method is the type of reasoning that flows from fact to theory. In the first place, economists collect information and facts then move towards providing evidence using economic theory and facts.
This method formulates principles using the sub-methods-observation, experimentations, and statistical methods. Data is collected about a particular economic theory and then conclusions are drawn.
Stages in this Method Includes:
Observation, formulation of a hypothesis, generalizing principles, and verifying against actual facts
In addition, since inductive method is based on facts, it is more realistic and reliable.
Again using statistical methods and experimentations makes the process more acceptable universally rather than just depending on your own reasoning and logic.
Finally, since the economic environment is dynamic and always changing, relying open a more scientific method always help reach logical conclusions.

Name: Edi Kenechukwu Stanley
Reg no: 20118506CF
Dept: philosophy
Assignment: what are the basic methods of analysis used by economists? Briefly and convincingly discuss each of them.

ANSWER;
The two basic method of economic analysis are namely; deductive and inductive methods of economic analysis.
* Deductive Method:
The deductive Method of economic analysis is a method which is analytical and abstract in its approach at arriving at a generalization, abstract in a way that mainly it works enough with logical reasoning, ideas and observations. For one to conduct a deductive analysis to derive an economic generalization, he/she has to honour these process, which are ; firstly, the economist should be able to significantly understand and identify the problem and it’s behavioural variables to work on and bring a solution to. Secondly, he or she has to make assumptions from a proper observation and also clearly define or breakdown the technical terms to be used, all to simplify the process of the analysis. Thirdly, the economist has to logically deduce hypothetical description from the assumptions made, the hypothesis could be description on relationships between factors affecting a phenomenon, however in the process of this logical deduction of hypothesis, one could be advised to use the mathematical means than the geometric means to avoid committing a logical fallacy. This is advices because mathematical means is more exact while geometric is complicated in it means and results.
Then lastly is the testing or verification of the deduced hypothesis. In the verification of hypothesis to derive a generalization, it is understood that due to absence of controlled experiments like the physical scientists do, Economists have to rely on uncontrolled experiences, personally engage in an increased number of direct observation of real events, engage in a careful interpretation of facts and economic data gathered, gathering of comparatively unprocessed materials such as files of business firms, market and locally published reports, government departments and its like, to establish a generalization. However, a contemporary way or method of testing hypothesis has been devices and has proven very useful and meritorious because it makes it possible to obtain more precisely, the degree of relationship between economic variables. This modern method, is termed statistical it econometric method, but then this method must be preceded by logically developed theories before it could be used.

* Inductive Method:
The inductive Method has some similarities with deductive Method in its process of analysis and derivation of an economic generalization, but distinguishes it from deductive Method is its empirical or statistical method of testing data or information gathered. In the steps followed to analyze and develop theories through inductive means, just like deductive, firstly is to identify the problem, after which the economist is to define the technical terms and variables related to the problem.
The next step is collection of data about variables and the possible functional relationship between relevant variables and this could be aided by preceded reasoning or thinking. After that is making or construction of a theory by evaluating and processing data collected and ascertaining how valid relationships between variables are. When theories has been constructed, prediction are to be made on its basis, when the predictions of the theory come in agreement with the facts and the behaviour of the economy, then a new theory is born, but if otherwise then a new theory with a better explanation has to take the place of the existing one, so to analyze and derive generalization or theories through inductive means, demands it requires number of observations, statistical collection and interpretation of data to achieve.
In conclusion, both method are not competitive rather complimentary in the process of economy analysation and derivation of generalization and theories.

NAME: Ugwuoke Okwudilichukwu David
Department: Philosophy
Reg. No 20691721AF

TWO WAY OF ECONOMIC ANALYSIS
1.Deductive Method
This is also called a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning are:

Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

Advantages of Deductive Method
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.
Disadvantages of Deductive Method

In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

(2) INDUCTIVE METHOD: This type of reasoning flows from fact you theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods observation,experimental, statisitical methods.

NAME: OKPANI BLESSING
DEPARTMENT: ECONOMICS
FACULTY: SOCIAL SCIENCES
JAMB REG: 20032285CA
MATRIC NO: 2020\242623

THE METHODS OF ECONOMIC ANALYSIS USED BY ECONOMIST
knowing that inductive and deductive methods are not just methods of economic analysis but are generalization in economics is going to help us understand that, they are the main economic method of analysis that economist use in their economic research.

DEDUCTIVE METHOD
This method is also called abstract, analytical prior method(knowledge that comes from the power of reasoning based on self evident truth) and represents an abstract approach to the derivation of economic generalization and theories. this method involves proper reasoning from one or more statements. for deductive method to be sound, the hypothesis must be correct.
example: all men are mortals, Desmond is a man-[true]

Principle steps in the process of deriving economic generalization through deductive logic are:

A) Perception of the problem: this is not an easy step in the deductive method because if illusion and hallucination are possible, then perceptual experience, as we ordinarily understand it, is impossible. In any scientific inquiry, the analyst must have a clear idea of the problem to be inquired into. He must know the significant variables regarding whose behavior and interrelationship he wants to derive generalization. The perception of the problem is by no means an easy task.

B)Definition of technical terms and making of assumptions( Postulates or premises): here the economist makes assumptions or suggests the existence, facts, or truth of the problem as basis of reasoning. Assumptions could be behavioral pertaining to the behavior of the economic variable or technological relating to the state of technology and the factor endowments.

C) Deducing hypotheses through logical deduction: a hypothesis describes relationships between factors affecting a phenomenon; it establishes the cause and effect relationship between the variables having a bearing on the phenomenon.
Then, through logical process, hypotheses is deduced from the assumptions made. this logical reasoning could be carried out verbally or it maybe conducted in symbolic terms using the language of what is known as symbolic logic.

D) Testing or verification of hypotheses: hypotheses gotten must be tested or verified before they are established as principles of economics. For this verification, there are no controlled experiments, because economist have to discover uniformities in the behavioral patterns of man.

INDUCTIVE METHOD
This method could also be called empirical method. It derives economic generalization on the basis of experience and observations.In this method, detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalization which follows from the observations collected
.

NAME: EZE SYLVIA IFEDIBA.
JAMB REGISTRATION NUMBER:20636892FA
FACULTY:SOCIAL SCIENCE.
DEPARTMENT: PHILOSOPHY.

INDUCTIVE METHOD
In this method data are collected with regard to certain economic phenomenon and effort is made to arrive at certain generalization on the basis of experience and observation.

DEDUCTIVE METHOD
Deductive method is also called abstract, analytical and a priori method represents an abstract approach to the derivation of economic generalizations and theories. It organizes the problem to be inquired into. It also defines the technical terms and makes good assumption which is often called postulates or premises.

NAME: OSUCHUKWU VIVIAN CHIAMAKA
REG NO: 21305622EF
DEPT: ECONOMICS
EMAIL: vivianosuchukwu@gmail.com

There are two major methods used by economists in analysing Economic situations, they include:

1. Deductive Method of Economic Analysis
Deductive method is known as the analytical, abstract or priori method. It starts with certain formal data and assumptions. Then by logical reasoning certain conclusions are made. It is with these undisputed fundamental facts and after adding some assumptions that theories are arrived at. For instance, it is assumed that businessmen aim at achieving maximum profit. It follows from this that businessmen buy the materials at the cheapest market and sell it in the most costly market.

In Deductive method of Economic Analysis we proceed from the general to the particular. This is also known as a hypothetical method because some of the assumptions may not correspond with actual facts, but very near actual facts are to be used as a premise for starting, reasoning and drawing conclusions.

A complete form of deductive method consists of three stages,

i. Observation ot perception of the problem;
ii. Making assumptions from logical reasoning
iii. Formulation of hypothesis, and
iv. Testing the hypothesis
Deductive reasoning provides us with hypotheses or generalizations. If the hypotheses are tested and verified with relevance to facts, they become valid economic laws.

Advantages of Deductive Method of Economic Analysis

1. Deductive method is exceedingly simple.

2. Deductive method obviates the necessity of experimentation. Economics being a social science, experimentation may not be available as in the case of physics or chemistry. So, the next best alternative to experiment is deductive reasoning.

3. The deductive method results in accuracy and exactness in generalization, because of logical reasoning. This method gives a high standard of precision in abstract economic reasoning.

Disadvantages of Deductive Method of Economic Analysis
Deductive method has its drawbacks also:
1. Deduction is based mainly on assumptions which are perfectly valid but If assumptions are wrong, generalizations made on the basis of wrong assumptions will be imperfect and invalid.

2. In deduction there is too much of abstraction and economists by means of their intellectual exercises produce only “intellectual toys” which have little connection with reality.

3. Deductive generalizations started on wrong premises will be dangerous when such generalization claim universal validity. For instance, if such faulty generalizations are made use of in framing government policies, the results would be nothing but disastrous.

Inductive Method of Economic Analysis
In this method, economists proceed from a practical angle to problems of science to reduce the gap between theory and practice. Induction is done by two forms, viz. experimentation and statistical form. Facts are collected first, then arranged and conclusions are drawn. Then these general conclusions are further verified with reference to actual facts.

The inductive method is generally associated with the statistical form of inductions. The statistical approach has a larger field in economic investigations than the method of experimentation. Further, the method of statistical induction is indispensable for the formulation of economic policy. Practically, Malthus presented his famous theory of population only after studying the facts of population in various countries; He then used statistics to support his theory. .

Advantages of Inductive Method of Economic Analysis
Inductive method has the following merits:

1. It is highly practical and realistic as it describes things as they are.

2. It is helpful in verifying the conclusions of the deductive method.

Disadvantages of Inductive Method of Economic Analysis
Inductive method has the following limitations:

1. When the investigators lack a balanced judgement there is the risk of drawing hurried conclusions based on inadequate information or data.

2. Collection of data in the inductive process is highly complex and time consuming.

3. Only induction alone will not deliver unless it is complemented by means of deductive reasoning. Without deduction, the inductive method would result in producing only a mass of unrelated and unconnected facts.

In conclusion, the two methods have to be made use of or combined to achieve the required objective. The two methods, deductive and inductive, are not competitive, but complementary in helping the investigator.

Name: Uzodigwe Isabel Chiemerie
Department: Nursing/Nursing sciences
Regno.: 20636611ff
Faculty: Health sciences and technology.
The methods of economics analysis are: Deductive method and Inductive method.
Deductive method: In this deductive method of economics analysis we proceed from the general to the particular.
This is also known as an hypothetical method for some of the assumptions may not correspond to the actual facts but very near the actual facts which may be used as premise for starting reasoning and drawing conclusions. Deductive method involves reasoning and a few fundamental propositions.
Inductive method: In this Inductive method of economics analysis, economists proceed from a practical angle to problems of science to reduce the difference between theory and practice. Induction is done by two forms:
Experimental and Statistical form.
In this method facts are collected first, arranged and conclusions are drawn.

NAME:UCHEAGA BLESSING CHISOM
DEPARTMENT:PURE AND INDUSTRIAL CHEMISTRY
REG No:2019/248163
FACULTY:PHYSICAL SCIENCE

What are the basic methods of analysis used by Economists?

The economic analysis involves the formulation of laws and generalizations through two methods namely:
Deductive and Inductive.

DEDUCTIVE METHOD
This is method can also be referred to as a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we have to go from general to specific.
The stages in deductive reasoning are:
* Observation of a task/ issue
* Making the hypothesis
* Testing the hypothesis using more observations, etc.
This reasoning actually gives us a hypothesis and if this hypothesis gets verified we will get a general economic principles or laws.
Moreover just as every thing has an advantage and disadvantage, so also those this method.
ADVANTAGES OF A DEDUCTIVE
METHOD
* It is a simple method, which doesn’t involve the use of any complex software analysis, etc.
* only a simple deductive logic is required.
* This method is really important for economists as it focuses upon economic reasoning which is of paramount importance.

DISADVANTAGES OF AN DEDUCTIVE
METHOD
In this method of reasoning we have to start from assumptions, thus, if the assumptions happen to be logically flawed then the whole process becomes faulty and would lead to wrong conclusions.
Thus, the logical fallacy is a disadvantage of this method.

INDUCTIVE METHOD
This kind of reasoning flows from facts to theory. First, we have to collect informations and facts and then move towards providing evidence using economic theory and facts.
This method formulates principles using the sub-methods:
*Observations
*Experimentations
*Statistical methods.

Data is as well collected about a particular economic theory and then conclusions are drawn. The stages in this method are:
* Observation
* Formulation of a hypothesis
* Generalizing principles
* Verifying against actual facts.

ADVANTAGES OF AN INDUCTIVE
METHOD
* Since this method is based on facts it is more realistic and reliable.
* Using the statistical methods and experimentations makes the process more scientific, thus, it is more acceptable universally rather than just depending on your own reasoning and logic.
* Since the economic environment is dynamic and always changing, relying upon a more scientific method will always helps in reaching logical conclusions.

DISADVANTAGES OF AN INDUCTIVE
METHOD
* If the data that is been used is insufficient and faulty it would lead to faulty conclusions, thereby making the hypothesis less reliable.
* It is a time-consuming process and thus really expensive as well.
* The collection of all the data is not an easy job and it varies from person to person. As to how they collect the data.

Economics analysis entails.the evaluation of cost benefits
There are two main methods of Economic analysis
– Deductive method this is called a priopri reasoning we start from unchallenged elementary assumptions or fact and then arrive on conclusion (build a hypothesis or theory) using logical analysis of self made analytical analysis.on this kind of reasoning we go from general to specific
Stages include:
*Observation of a task
*Making hypothesis
*Testing hypothesis using more observations
If hypothesis get verified then it is now a certified general economic principle.
Advantages:
*It is a simple method thus doesn’t involve the use of complex software analysis
*It is important for economist as it focuses on economics reasoning
Disadvantages:
Since the method starts from assumptions, if the assumption happens to be logically flawed the whole process will be faulty therefore give wrong conclusion

Inductive method:
This method flows from fact to theory. First, info and facts are collected which will move towards providing evidence using Economic facts and information.
Stages include:
*Observation
*Formulation of hypothesis
*Generalizing principles
*Verifying against actual facts
Advantages:
*Since it is based on facts it is more reliable and realistic
*Making use of experimentation makes the process more scientific this it’s more acceptable generally
Disadvantages:
*If data used is insufficient and faulty it will lead to wrong conclusion
*It’s time consuming and expensive

Economic analysis involves various methods. The basic methods of economic analysis are
1. deductive method and
2. Inductive method
Both methods uses generalization and theory
1. DEDUCTIVE METHOD
Also called analytical or prior method.It involves deriving conclusions from known accepted truth, takes them and applies them to draw conclusion
For instance,if I accept the general proposition that Nigerians are lawless.I can deductively infere that we are uncivilized. Deductive method moves from general to particular, conclusion of your inference cannot be false given that the premises are true.
Generalization Steps of deductive method.

1. Perception of of the problem- a clear and precise idea of problem is needed
2. Precisely find the technical terms,define them and make assumptions
3. Deduce hypothesis– from the assumptions, made, hypothesis are deduced.The hypothesis could be null or unnull hypothesis
4. Test the hypothesis- before theory are established, hypothesis are verified through direct observation and statistical methods
MERITS OF DEDUCTIVE METHOD.
1. Less time consuming and near to reality
2. Less expensive
3. It’s simple because it’s analytical
4. It can be used to derive economic theories
DEMERITS.
1.The method is not applicable universally
2. It’s highly abstract,requires alot of care to avoid faulty economic reasoning
The imperfect nature of this method led classic and neo classic economists to employe inductive method.
2. INDUCTIVE METHOD
Also called empirical method, and was adopted by Historical School of Economists in a bid to improve faulty assumptions of deductive method.It derives generalization on the basics of experiments, observation and statistical methods.
For example, observation of UNN students during rainy season show that 90% go with umbrella,6%wear rain coat despite it’s high cost,4%go without umbrella or rain coat.
From above,we see that UNN students uses umbrella during rainy season unless they are devoid of sense
A

Name:Kamanu Judith Chinaza
Department : Business Education
Faculty: Vocational and Technical Education
Reg number :21676944CA
Course: Eco 101

There are two basic methods of economic analysis are :
1) Deductive method
2) Inductive method

DEDUCTIVE METHOD
This is also called abstract, analytical and priori method that represents an abstract approach to derivation of economic generalization and theories.
The ways of generalizations are:
1. Perception of the problem to be enquired into
2. Defining precisely the technical terms and making appropriate assumptions often called Postulate or premises.
3.Deducing hypothesis that is deriving conclusions from the premises through the process of logical reasoning.
4. Testing of the hypothesis deduced.
This method is near to reality, it is less consuming and expensive.it is also simple because it is analytical. It’s disadvantages are that it is highly abstract, the premise where inferences are drawn may not hold.

INDUCTIVE METHOD
it is also called emperical method. It’s process of reasoning from practical facts to general principles. This method derives economic generalization on the basis in experimentations, observations and statistical method. Data collected is mostly about a certain economic phenomenon.
STEPS
Observations
Formation of hypothesis
Generalization
Verification
This method is based on facts;it is realistic
It makes statistical techniques easy therefore its more reliable.
It is dynamic
It also helps in future investigations
But it’s disvadvantages are
Generalizations obtained may be faulty if conclusions are drawn from insufficient data.
* collection of data isn’t easy.
It is time consuming and expensive.

Methods of Economic Analysis,.
1Deductive method,also know as abstract or priori method which required abstract approach to the derivation of Economic generalisation and theories.It implies perception of the problem which means having clear knowledge of the two variables that you want to derive your generalisation from.Also,defining your postulate which requires finding the relationship between the two variables and why you think the two variables are related based on your own observation which makes you think so.There also is hypothesis which requires predicting the possible factors that may affect the relationship between the two variables.Testing the hypothesis, verifying if the factors that are assumed to affect the relationship between two variables are factual in nature before it is generally accepted.
2.lnductive method also know as empirical method requires collecting many observation on a particular data for using statistical methods to analysis whether is consistent with actual facts or not.

NAME: OKORO SANDRA ADAUGO

REG NO: 2019/248481

EMAIL: adaugosandra2019@gmail.com

Economic analysis involves the formulation of laws and generalizations through two methods- deductive and inductive.

Deductive method is also known as abstract method or analytical method. This method is based on a priori reasoning and conclusions are drawn from certain fundamental assumptions
The deductive method moves from the general assumption to the specific application.

STEPS OF DEDUCTIVE METHOD:
The steps in deductive reasoning are:
i) Observation of a task/ issue
ii)Making the hypothesis
iii) Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

ADVANTAGES OF DEDUCTIVE METHOD

The deductive method is a simple method, because it doesn’t involve the use of any complex software analysis only simple deductive logic is required.
It is also real, powerful, exact, indispensable and universal.
This method is important for economists as it focuses on economic reasoning which is of utmost importance.

DISADVANTAGES OF DEDUCTIVE METHOD
In this method of reasoning we start from assumptions, meaning that if the assumptions happen to be logically flawed or unrealistic the whole process becomes faulty and would give misleading conclusions. Thus, logical fallacy is a disadvantage of this method.
The deductive method is also not applicable universally because the premises from which they are deduced may not hold good at all time and places.

INDUCTIVE METHOD

The inductive method is also called the empirical method, it involves the process of reasoning from particular facts to general principle
First, we collect information and facts and then move towards providing evidence using economic theory and facts.
The inductive method moves from specific observations to generalization.

STEPS OF INDUCTIVE METHOD:
The main steps involved in the application of inductive method are:
(i) Observation
(ii) Formulation of hypothesis.
(iii) Generalizing principles
(iv) Verifying against actual facts.

ADVANTAGES OF INDUCTIVE METHOD
(i) It is based on facts as such the method is realistic.

(ii) Induction method also helps in future investigations.

(iii) Inductive method is dynamic. The changing economic phenomenon are analyzed and on the basis of collected data, conclusions and solutions are drawn from them.

(iv) In order to test the economic principles, method makes statistical techniques. The inductive method is, therefore, more reliable.

DISADVANTAGES OF INDUCTIVE METHOD:
The main weaknesses of this method are as under:
(i) The inductive method is time-consuming and expensive.

(ii) The collection of data itself is not an easy task. The sources and methods employed in the collection of data differ from investigator to investigator. The results, therefore, may differ even with the same problem.

(iii) If conclusions drawn from insufficient data, the generalizations obtained may be faulty

The method used by economist in reasoning are inductive and deductive reasoning is that inductive reasoning aims at developing a theory while deductive reasoning aims at testing an existing theory. Inductive reasoning moves from specific observations to broad generalizations, and deductive reasoning the other way around.
18 Apr 2019

NAME: IGWEDIBIA JUDITH CHIAMAKA
MATRIC NO: 2019/246689
DEPT: PURE AND INDUSTRIAL CHEMISTRY
EMAIL: igwedibiajudith@gmail.com
Basic Methods of Analysis used by Economists

(1) Deductive Method
(2) Inductive Method.

(1) Deductive Method of Economic Analysis:
The deductive method is also known as analytical, abstract or prior method.
Steps of Deductive Method:
The main steps involved in deductive logic are as follows:
(i) Perception of the problem to be inquired into: In the process of deriving economic generalizations, the analyst must have a clear and precise idea of the problem to be inquired into.
(ii) Defining of terms: The next step in this direction is to define clearly the technical terms used analysis. Further, assumptions made for a theory should also be precise.
(iii) Deducing hypothesis from the assumptions: The third step in deriving generalizations is deducing hypothesis from the assumptions taken.
(iv) Testing of hypothesis: Before establishing laws or generalizations, hypothesis should be verified through direct observations of events in the rear world and through statistical methods. (Their inverse relationship between price and quantity demanded of a good is a well established generalization).
Merits of Deductive Method:
The main merits of deductive method are as follows:
i. It is less time consuming and less expensive.
(iv) The method is simple because it is analytical.
Demerits of Deductive Method:
i. The deductive method is highly abstract. It require; a great deal of care to avoid bad logic or faulty economic reasoning.

(2) Inductive Method of Economic Analysis:
Inductive method which also called empirical method was adopted by the “Historical School of Economists”. It involves the process of reasoning from particular facts to general principle.
Steps of Inductive method:
The main steps involved in the application of inductive method are:
(i) Observation.
(ii) Formation of hypothesis.
(iii) Generalization.
(iv) Verification.
Merits of Inductive Method:
(i) It is based on facts as such the method is realistic.
(ii) In order to test the economic principles, method makes statistical techniques. The inductive method is, therefore, more reliable.
Demerits of Inductive Method:
The main weaknesses of this method are as under:
(i) If conclusions drawn from insufficient data, the generalizations obtained may be faulty.
(iii) The inductive method is time-consuming and expensive.

Any economic analysis involves the formulation of laws and generalizations through two methods- deductive and inductive
Deductive Method
This is also called a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning are:

Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

Advantages of Deductive Method
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.
Disadvantages of Deductive Method

In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

Deductive And Inductive Methods

Inductive Method
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods.

Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method are:

Observation
Formulation of a hypothesis
Generalizing principles
Verifying against actual facts.
Advantages of Inductive Method
Since it is based on facts it is more realistic and reliable.
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.
Disadvantages of Inductive Method
If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable.
It is a time-consuming process and thus expensive as well.
The collection of all the data is not an easy job and varies from person to person. As to how they collect data.

Name: Samuel Favour Udochukwu
Reg num: 22000131df
Dept: Public Administration and Local Government
Faculty: Social Science

Methods of Economic Analysis

1. Deductive Method= The deductive method can also be called abstract method. There are principle steps in which we can derive economic generalizations through deductive method.
a) Perception of the problem. In any scientific inquiry, the analyst must have a clear idea of the problem he wants to solve.
b) He must define precisely the various technical terms to be used in the analysis.
c) Deducing hypothesis through logical deduction. A hypothesis describes relationship between factors affecting a phenomenon.
d) Hypothesis gotten above have to be verified before the are established as principles of economics.
2. Inductive Method= The inductive method is also called “Empirical method”. It obtains economic generalizations on the basis of experience and observations. In this method, detailed data are gathered with regard to a particular economic term. Effort is now made to get at certain generalizations which follow from observations collected. Empirical studies made in inductive approach also brings a light significant economic facts which require analytical explanation through deductive logic.

NAME: CHUKWU IFEOMA RITA

REG. NO: 2019/241539

EMAIL: chukwuifeomaa@gmail.com

Methods Of Economic Analysis.

There are two basic methods of analysis used by Economists

-Deductive Method
-Inductive Method

Deductive Method.
This is also called analytical or a prior method.
Deductive Method consists in deriving conclusions from general truths, takes few general principles and applies them in drawing conclusions

Steps of Deductive Method
(I) Perception Of The Problem To Be Inquired Into:
The first step involved in deductive method of economic analysis, the analyst must have an exact and comprehensible idea of the problem to be inquired into

(II) Defining Of Terms:
In this step, you need to clearly define the technical terms used in the analysis

(III) Deducing Hypothesis from the assumptions:
Here, you need to draw conclusion on the hypothesis from the assumptions

(IV) Testing Of Hypothesis:
On the process of establishing laws, hypothesis must first be tested

ADVANTAGES.
➜The deductive method is less expensive and less time consuming
➜This method is simple because it is analytical
➜This method also helps in deriving economic theories

DISADVANTAGES.
➜The method is highly abstract; it requires a good deal of care to avoid bad logic or faulty economic reasoning
➜The premises from which inferences are drawn may not hold good at all times and places.
➜The deductive method is simple and precise only when the assumptions are valid.

Inductive Method.
This is also called empirical method. It involves the process of reasoning from particular facts to general principle

Steps Of Inductive Method
(I) Observation
(II) Formation Of Hypothesis
(III) Generalization
(IV) Verification

ADVANTAGES.
➜Inductive method also helps in future investigation
➜It is based on facts as such, the method is realistic.
➜This method is reliable and it makes statistical techniques

DISADVANTAGES
➜The inductive method is time consuming and expensive.
➜The generalization may be faulty only if the conclusions are drawn from insufficient data.
➜The sources and methods employed in the collection of data differ from investigator to investigator. Therefore, the results may differ even with the same problem

The economist uses two method in analysis used and they are inductive and deductive method reasoning is that inductive reasoning aims at developing a theory while deductive reasoning aims at testing an existing theory. Inductive reasoning moves from specific observations to broad generalizations, and deductive reasoning the other way around.

There are two main basic method of Economic Analysis, which is Deductive and Inductive reasoning
DEDUCTIVE METHOD
This is a simple logic of knowledge required based solely on experience or personal observations that comes with the power of reasoning which uses general principles to arrive at specific facts or conclusion. It is ought to give us a hypothesis and when gets verified we get general Economic principles or laws.
But when our assumption happens to be logically flawed the whole process becomes faulty which is one disadvantage of this method.
Deductive method can also be called Priori reasoning.

INDUCTIVE METHOD
This is a method that formulates principles using the sub methods observations, experiments, statistical, Economic theory etc to collect information and flows of fact to theory, therefore providing evidence.
This method is said to be more realistic, reliable and acceptable universally because of the statistical methods and experimentations than just depending on your own reasoning and logic, but when the collection of all the data used is insufficient and faulty it would lead to faulty conclusions making the hypothesis less reliable.

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INDUCTIVE:This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods…
Advantages; Since it is based on facts it is more realistic and reliable. And also
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Disadvantages; If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable. And
It is a time-consuming process and thus expensive as well…

DEDUCTIVE METHOD:This is also called a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning are:
Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
Advantages; It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.
Disadvantages; In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

Name: Augustine Uchechukwu Sampson
Reg no:2020/243121
Department: Philosophy

What are the basic methods of analysis used by economists?
they are two basic methods:
(1) Deductive method
(2) Inductive method

Briefly and convincingly discuss each of them.
(1) Deductive method:it means drawing of inference or reasoning from universal to individual.
Steps of Deductive method
(a)formulating the assumption: the investigator forms an assumption which are the basic of hypothesis in any economic inquiry,more that one set of assumption.
(b) selecting the problem:the problem which investigates from inquiry must be stated clearly the more narrow the problem,the better it will be to conduct the inquiry.

(2) Inductive method:it means collecting information from personal research and giving it out to the universe.
Steps of Inductive method
(a)the data should be analysed using appropriate analytical statical technique.
(b)the problem should be properly stated.
(c) observation:the problem should be observed in a special way

What are the basic methods of analysis used by Economists? Briefly and convincingly discuss each of them.
Answers
The basic methods of analysis used by economists are
1.Deductive method.
2. Inductive method.
1. Deductive method
The deductive method is also called abstract, analytical and a priori method and represents an abstract approach to the derivation of economic generalisations and theories.
The principal steps in the process of deriving economic generalisations through deductive logic are:
(a) Perception of the problem to be enquired into;
(b) Defining precisely the technical terms and making appropriate assumptions, often called postulates or premises;
(c) Deducing hypotheses, that is, deriving conclusions from the premises through the process of logical reasoning; and
(d) Testing of hypothesis deduced.
2. Inductive Method
The inductive method which is also called empirical method derives economic generalisations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisations which follow from the observations collected.
There are three ways which can be used for deriving economic prin­ciples and theories.
They are:
(a) Experimentation,
(b) observations,
(c) statistical or econometric method.

METHOD OF ANNALYSIS
1. DEDUCTIVE METHOD
2. INDUCTIVE METHOD

1. DEDUCTIVE METHOD:It is also called abstract analytical and proir method and represent an abstract approach. Precisely the technical terms and making of assumptions, deducing hypothesis and testing the hypothesis is also a process followed in deductive method .
Then by logical reason they arrive at certain conclusions

2. INDUCTIVE METHOD:It Involves observation and measures of deriving economic generalization in the basis of experience and they also use econometric method of observation. In the inductive methods facts are collected and conclusions are drawn.

Method of economic analysis
(1)Deductive method or prior reasoning it starts from unchallenged elementary or rudimentary assumption /facts and then arrive at conclusions (building a hypothesis or theory) using logical analysis or our own analytical abilities.
Observation of a task /issues
-making the hypothesis
-testing the hypothesis using more observation.
-This reasoning gives us a hypothesis and if this hypothesis get verified we get general economics principles or law
Inductive method
This type of reasoning flows from facts of theory, first we collect information and facts and then move towards providing evidence using economic theory and facts, this method formulates principles using the sub-method observation, experimentation,statistical method.
Stages in these inductive method
1.Observation
2.Formulation of hypothesis
3.Generalizing principles
2.Verifying against actual facts.

NAME: Abonyi Ifebuche Faith
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Email: ifebuchefaith51@gmail.com

Firstly, Economic analysis can be defined as a process by which economic laws, generalizations and theories are found. There are two basic methods of economic analysis, namely;

1.. DEDUCTIVE METHOD: Deductive reasoning,also known as priori, analytical or hypothetical reasoning make analysis based on assumptions and generalizations which precede from general to particular until a theory is made and established.

EXAMPLE:All valuable goods are expensive, diamond is a valuable good, therefore,diamond is expensive. Below are the steps:
1. Observation of an issue/problem: The economist must have a clear idea of what the problem is.
2. Definition of the technical terms and making assumptions: These assumptions are made on careful observations over time. They are called POSTULATES or PREMISES.
3. Hypothesis: hypothesis are made from observations. Note that hypothesis can be either NULL or ALTERNATE.
4.Test: Lastly, you test your hypothesis using statistical method.

⚫Advantages:It is simple,precise, less expensive, less time consuming and helps in deriving economic theories.
⚫Disadvantages:It depends highly on assumptions and varies from time to time and place to place.

2.. INDUCTIVE METHOD: The inductive method which makes use of data-induced experiments, observations and statistics, involves the process of reasoning which transcends from general to particular. BACON described it as an ascending order.

EXAMPLE:If tomatoes is a perishable goods and most tomatoes I have bought are sold cheap, then all perishable goods are sold cheap. Below is the step by step procedure;
1️⃣ perception of the problem
2️⃣collection of data/facts
3️⃣Making of observations for a period of time
4️⃣Making of Hypothesis.
5️⃣Testing and Generalization.

⚫Advantages:It is based on factual data, it is dynamic
⚫Disadvantages:It uses insufficient data for a large general purpose, its expensive to run, it’s tedious and time consuming.

NAME:AYOGU FREDRICK CHIBUIKE
REG NO: 2019/242710
DEPT: PURE AND INDUSTRIAL CHEMISTRY
COURSE CODE:ECO 101
COURSE TITLE: PRINCIPLE OF ECONOMICS

QUESTION: TWO METHODS OF ECONOMIC ANALYSIS

There are two methods of reasoning in theoretical economics. They are the deductive and inductive methods.

As a matter of fact, deduction and induction are the two forms of logic that help to establish the truth.

The Deductive Method:
Deduction Means reasoning or inference from the general to the particular or from the universal to the individual. The deductive method derives new conclusions from fundamental assumptions or from truth established by other methods. It involves the process of reasoning from certain laws or principles, which are assumed to be true, to the analysis of facts.
Then inferences are drawn which are verified against observed facts. Bacon described deduction as a “descending process” in which we proceed from a general principle to its consequences. Mill characterised it as a priori method, while others called it abstract and analytical.
Deduction involves four steps: (1) Selecting the problem. (2) The formulation of assumptions on the basis of which the problem is to be explored. (3) The formulation of hypothesis through the process of logical reasoning whereby inferences are drawn. (4) Verifying the hypothesis. These steps are discussed as under.
(1) Selecting the problem:
The problem which an investigator selects for enquiry must be stated clearly. It may be very wide like poverty, unemployment, inflation, etc. or narrow relating to an industry. The narrower the problem the better it would be to conduct the enquiry.
(2) Formulating Assumptions:
The next step in deduction is the framing of assumptions which are the basis of hypothesis. To be fruitful for enquiry, the assumption must be general. In any economic enquiry, more than one set of assumptions should be made in terms of which a hypothesis may be formulated.
(3) Formulating Hypothesis:
The next step is to formulate a hypothesis on the basis of logical reasoning whereby conclusions are drawn from the propositions. This is done in two ways: First, through logical deduction. If and because relationships (p) and (q) all exist, then this necessarily implies that relationship (r) exists as well. Mathematics is mostly used in these methods of logical deduction.
(4) Testing and Verifying the Hypothesis:
The final step in the deductive method is to test and verify the hypothesis. For this purpose, economists now use statistical and econometric methods. Verification consists in confirming whether the hypothesis is in agreement with facts. A hypothesis is true or not can be verified by observation and experiment. Since economics is concerned with human behaviour, there are problems in making observation and testing a hypothesis.
For example, the hypothesis that firms always attempt to maximise profits, rests upon the observation that some firms do behave in this way. This premise is based on a priori knowledge which will continue to be accepted so long as conclusions deduced from it are consistent with the facts. So the hypothesis stands verified. If the hypothesis is not confirmed, it can be argued that the hypothesis was correct but the results are contradictory due to special circumstances.
Under these conditions, the hypothesis may turn out to the wrong. In economics, most hypotheses remain unverified because of the complexity of factors involved in human behaviour which, in turn, depend upon social, political and economic factors. Moreover, controlled experiments in a laboratory are not possible in economics. So the majority of hypotheses remain untested and unverified in economics.
Merits of Deductive Method:
The deductive method has many advantages.
(1) Real:
It is the method of “intellectual experiment,” according to Boulding. Since the actual world is very complicated, “what we do is to postulate in our own minds economic systems which are simpler than reality but more easy to grasp. We then work out the relationship in these simplified systems and by introducing more and more complete assumptions, finally work up to the consideration of reality itself.” Thus, this method is nearer to reality.
(2) Simple:
The deductive method is simple because it is analytical. It involves abstraction and simplifies a complex problem by dividing it into component parts. Further, the hypothetical conditions are so chosen as to make the problem very simple, and then inferences are deduced from them.
(3) Powerful:
It is a powerful method of analysis for deducing conclusions from certain facts. As pointed out by Cairnes, The method of deduction is incomparably, when conducted under proper checks, the most powerful instrument of discovery ever wielded by human intelligence.
(4) Exact:
The use of statistics, mathematics and econometrics in deduction brings exactness and clarity in economic analysis. The mathematically trained economist is able to deduce inferences in a short time and make analogies with other generalisations and theories. Further, the use of the mathematical-deductive method helps in revealing inconsistencies in economic analysis.
(5) Indispensable:
The use of deductive method is indispensable in sciences like economics where experimentation is not possible. As pointed out by Gide and Rist, “In a science like political economy, where experiment is practically impossible, abstraction and analysis afford the only means of escape from those other influences which complicate the problem so much.”
(6) Universal:
The deductive method helps in drawing inferences which are of universal validity because they are based on general principles, such as the law of diminishing returns.
Demerits of Deductive Method:
Despite these merits, much criticism has been levelled against this method by the Historical School which flourished in Germany.
1 .Unrealistic Assumption:
Every hypothesis is based on a set of assumptions. When a hypothesis is tested, assumptions are indirectly tested by comparing their implications with facts. But when facts refute the theory based on the tested hypothesis, the assumptions are also indirectly refuted. So deduction depends upon the nature of assumptions. If they are unrealistic, in this method, economists use the ceteris paribus assumption. But other things seldom remain the same which tend to refute theories.
2. Not Universally Applicable:
Often the conclusions derived from deductive reasoning are not applicable universally because the premises from which they are deduced may not hold good at all time and places. For instance, the classicists assumed in their reasoning that particular conditions prevailing in England of their times were valid universally. This supposition was wrong. Prof. Lerner, therefore, points out that the deductive method is simply “armchair analysis” which cannot be regarded as universal.
3. Incorrect Verification:
The verification of theories, generalisations or laws in economics is based on observation. And right observation depends upon data which must be correct and adequate. If a hypothesis is deduced from wrong or inadequate data, the theory will not correspond with facts and will be refuted. For instance, the generalisations of the classicists were based on inadequate data and their theories were refuted. As pointed out by ircholson, “the great danger of the deductive method lies in the natural aversion to the labour of verification.
4. Abstract Method:
The deductive method is highly abstract and requires great skill in drawing inferences for various premises. Due to the complexity of certain economic problems, it becomes difficult to apply this method even at the hands of an expert researcher. More so, when he uses mathematics or econometrics.
5. Static Method:
This method of analysis is based on the assumption that economic conditions remain constant. But economic conditions are continuously changing. Thus this is a static method which fails to make correct analysis.
6. Intellectually:
The chief defect of the deductive method “lies in the fact that those who follow this method may be absorbed in the framing of intellectual toys and the real world may be forgotten in the intellectual gymnastics and mathematical treatment.

The Inductive Method:
Induction “is the process of reasoning from a part to the whole, from particulars to generals or from the individual to the universal.” Bacon described it as “an ascending process” in which facts are collected, arranged and then general conclusions are drawn.

The inductive method was employed in economics by the German Historical School which sought to develop economics wholly from historical research. The historical or inductive method expects the economist to be primarily an economic historian who should first collect material, draw gereralisations, and verify the conclusions by applying them to subsequent events. For this, it uses statistical methods. The Engel’s Law of Family Expenditure and the Malthusian Theory of Population have been derived from inductive reasoning.
The inductive method involves the following steps:
1. The Problem:
In order to arrive at a generalisation concerning an economic phenomenon, the problem should be properly selected and clearly stated.
2. Data:
The second step is the collection, enumeration, classification and analysis of data by using appropriate statistical techniques.
3. Observation:
Data are used to make observation about particular facts concerning the problem.
4. Generalisation:
On the basis of observation, generalisation is logically derived which establishes a general truth from particular facts.
Thus induction is the process in which we arrive at a generalisation on the basis of particular observed facts.
The best example of inductive reasoning in economics is the formulation of the generalisation of diminishing returns. When a Scottish farmer found that in the cultivation of his field an increase in the amount of labour and capital spent on it was bringing in less than proportionate returns year after year, an economist observed such instances in the case of a number of other farms, and then he arrived at the generalisation that is known as the Law of Diminishing Returns.
Merits of Inductive Method:
The chief merits of this method are as follows:
(1) Realistic:
The inductive method is realistic because it is based on facts and explains them as they actually are. It is concrete and synthetic because it deals with the subject as a whole and does not divide it into component parts artificially
(2) Future Enquiries:
Induction helps in future enquiries. By discovering and providing general principles, induction helps future investigations. Once a generalisation is established, it becomes the starting point of future enquiries.
(3) Statistical Method:
The inductive method makes use of the statistical method. This has made significant improvements in the application of induction for analysing economic problems of wide range. In particular, the collection of data by governmental and private agencies or macro variables, like national income, general prices, consumption, saving, total employment, etc., has increased the value of this method and helped governments to formulate economic policies pertaining to the removal of poverty, inequalities, underdevelopment, etc.
(4) Dynamic:
The inductive method is dynamic. In this, changing economic phenomena can be analysed on the basis of experiences, conclusions can be drawn, and appropriate remedial measures can be taken. Thus, induction suggests new problems to pure theory for their solution from time to time.
(5) Histrico-Relative:
A generalisation drawn under the inductive method is often histrico-relative in economics. Since it is drawn from a particular historical situation, it cannot be applied to all situations unless they are exactly similar. For instance, India and America differ in their factor endowments. Therefore, it would be wrong to apply the industrial policy which was followed in America in the late nineteenth century to present day India. Thus, the inductive method has the merit of applying generalisations only to related situations or phenomena.
Demerits of Inductive Method:
However, the inductive method is not without its weaknesses which are discussed below.
(1) Misenterpretation of Data:
Induction relies on statistical numbers for analysis that “can be misused and misinterpreted when the assumptions which are required for their use are forgotten.”
(2) Uncertain Conclusions:
Boulding points out that “statistical information can only give us propositions whose truth is more or less probable it can never give us certainty.”
(3) Lacks Concreteness:
Definitions, sources and methods used in statistical analysis differ from investigator to investigator even for the same problem, as for instance in the case of national income accounts. Thus, statistical techniques lack concreteness.
(4) Costly Method:
The inductive method is not only time-consuming but also costly. It involves detailed and painstaking processes of collection, classification, analyses and interpretation of data on the part of trained and expert investigators and analysts
(5) Difficult to Prove Hypothesis:
Again the use of statistics in induction cannot prove a hypothesis. It can only show that the hypothesis is not inconsistent with the known facts. In reality, collection of data is not illuminating unless it is related to a hypothesis.
(6) Controlled Experimentation not Possible in Economics:
Besides the statistical method, the other method used in induction is of controlled experimentation. This method is extremely useful in natural and physical sciences which deal with matter. But unlike the natural sciences, there is little scope for experimentation in economics because economics deals with human behaviour which differs from person to person and from place to place.
Further, economic phenomena are very complex as they relate to man who does not act rationally. Some of his actions are also bound by the legal and social institutions of the society in which he lives. Thus, the scope for controlled experiments in inductive economics is very little. As pointed Out by Friendman, “The absence of controlled experiments in economics renders the weeding out of unsuccessful hypo-these slow and difficult.”
Conclusion:
The above analysis reveals that independently neither deduction nor induction is helpful in scientific enquiry. In reality, both deduction and induction are related to each other because of some facts. They are the two forms of logic that are complementary and co-relative and help establish the truth.
Marshall also supported the complementary nature of the two methods when he quoted Schmoller: “Induction and deduction are both needed for scientific thought as the right and left foot are needed for walking.” And then Marshall stressed the need and use of integrating these methods.
Now-a-days, economists are combining induction and deduction in their studies of economic phenomena in various fields for arriving at generalisations from observed facts and for the indirect verification of hypotheses. They are using the two methods to confirm the conclusions drawn through deduction by inductive reasoning and vice versa. Thus true progress in economic enquiries can be made by a wise combination of deduction and induction.

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Economics analysis in most cases involves the formation of laws and this can be achieved by the methods
1.Deductive Reasoning
2.inductive Reasoning
Deductive reasoning_also known as priori reasoning,involves the observation of issues, making and testing hypothesis using more observation and if generally acceptable becomes an economic law…
Inductive Reasoning_it is a fact, information and theories are gathered and tested on through observation result and experiment and obtained result may or may not be verified.this method is more reliable since it is based on fact and statistical methods are used in this approach,it is time consuming and expensive and can be affected by limited data sources.

Methods of economic analysis
We have two most important methods of economic analysis they are ;
1.) Deductive reasoning : This is a fundamental structure of valid reasoning. It initiates with a general statement or hypothesis and examines the possibilities to reach a specific, logical conclusion. Deductive reasoning works from the more specific. We might begin with thinking up a theory about our topic of interest . We then narrow that down into more specific hypothesis that we can test . We narrow down even further when we collect observations to address the hypothesis. This ultimately leads us to be able to test the hypothesis with specific data , a confirmation of our original theories.
Example
Example:
Let there be 360 degrees in circle – (A general assumption)
There are four right angles in circle – (A logical argument)
Therefore this right angle has 90 degrees – (A particular conclusion)

2.) Inductive reasoning : this seeks lane generalization from specific observations. In essence there is data and then conclusions are drawn from the data. We begin with specific observations and measures, begin to detect patterns and regularities , formulate some tentative hypothesis that we can explore, and finally end up developing some general conclusions or theories.
Example
Example:
This apple falls to the ground. (A particular observation)
All apples fall to the ground. (More observations)
All objects attract each other. (A general explanation)

There are two methods of economic analysis:
A. Deductive Method
The deductive method, also known as analytical or abstract method, consists of deriving conclusions from general truths and principles. This type of approach is concerned with developing an hypothesis based on existing theory and then designing a research strategy to test the hypothesis. It explores a known theory or phenomenon and verifies if that theory is valid in certain circumstances.
A deductive method follows the following steps:
1. There must be a precise or clear idea of the problem
2. Defining the technical terms used in the analysis and making logical assumptions.
3. Making or deducing hypothesis from the assumptions taken.
4. Lastly, testing or verifying the hypothesis through direct observations of areas and statistical methods.
Merits:
1. The method is less time consuming and less expensive.
2. It is a simple and analytical method.
3. It uses mathematical techniques in developing theories which brings exactness and clarity in economic analysis.
Demerits:
1. This method is precise only if the assumptions are valid. Sometimes, the assumptions turn out to be based on half truths or have no relation to reality. Therefore, the conclusions from the assumptions will be misleading.
2. It is highly abstract. It needs a lot of care to avoid bad logic or faulty economic reasoning.
B. Inductive Method
The inductive method, also known as empirical method, involves the process of reasoning from particular facts to general principles. It derives generalizations from experiments, observations and statistical methods. Here, data is collected on a particular economic phenomenon. They are systematically arranged and general conclusions are drawn from them. For instance, we observe 50 people in the market. We find out that 45 persons buy foreign product’s irrespective of it’s high rate just to patronize them while the remaining 5 persons settle for local product’s because they are cheaper. From this observation, we conclude that people like to buy foreign product’s as long as their income rate is above their purchasing power. There are steps to conducting this method:
1. Making Observations
2. Forming hypothesis
3. Generalizations
4. Making verifications
Merits:
1. It is based on facts which makes it realistic
2. It makes use of statistical techniques which makes it more reliable.
3. The method is dynamic. As economic phenomenon changes, they are analyzed and on the basis of collected data, conclusions and solutions are drawn from them.
Demerits:
1. It is time consuming and expensive.
2. Collection of data is not easy.
3. If the conclusions are gotten from sufficient data, the generalizations obtained may be faulty.
Reg no: 22244035DA

Uguwuonah joy Ifunaya
Reg no:2019/244617
Methods of Economic Analysis: Deductive Method and Inductive Method Some of the most important methods of economic analysis are as follows: 1. Deductive Method 2. Inductive Method.

Economic generalisations describe the laws or statements of tendencies in various branches of economics such as production, consumption, exchange and distribution of in­come. In the view of Robbins, economic generalisations or laws are statements of uniformities which describe human behaviour in the allocation of scarce resources between alternative ends.

The generalisations of economics like the laws of other sciences, state cause and effect relation­ships between variables and describe those economic hypotheses which have been found consistent with facts or, in other words, have been found to be true by empirical evidence. But a distinction may be drawn between a generalisation (law) and a theory. A law or generalisation just describes the relationship between variables; it does not provide any explanation of the described relation. On the other hand, a theory provides an explanation of the stated relation between the variables, that is, it brings out the logical basis of the generalisation. An economic theory or a model derives a generalisation through process of logical reasoning and explains the conditions under which the stated generalisation will hold true.

1. Deductive Method:

Generalisations in economics have been derived in two ways:

(1) Deductive Method,

(2) Induc­tive Method. The principal steps in the process of deriving economic generalisations through deductive logic are:

(a) Perception of the problem to be enquired into;

(b) Defining precisely the technical terms and making appropriate assumptions, often called postulates or premises; The principal steps in the process of deriving economic generalisations through deductive logic are:

(a) Perception of the problem to be enquired into;

(b) Defining precisely the technical terms and making appropriate assumptions, often called postulates or premises; 2. Inductive Method:

The inductive method which is also called empirical method derives economic generalisations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisations which follow from the observations collected.

But, it is worth mentioning that the number of observations has to be large if it can yield a valid economic generalisation. One should not generalise on the basis of a very few observations. There are three ways which can be used for deriving economic prin­ciples and theories.

They are:

(a) Experimentation,

(b) observations,

(c) statistical or econometric method.

As has been mentioned above, the experimentation, that is, the use of contrived experi­ments is of limited applicability in economics. First, unlike natural sciences which are concerned with analysing the behaviour of either inanimate objects or obedient animals such as rats and rabbits under the influence of chloroform, economics deals with the behaviour of man who is quite fickle, wayward and unmanageable.

Besides, man cannot tolerate the idea of being experimented upon, either individually or collectively. Secondly, an economic phenomenon is the result of multiplicity of factors and causes acting and interacting upon each other.

Therefore, economic phenomenon does not repeat itself in the same uniform pattern. Numerous factors acting on an economic phe­nomenon ‘disturb’ it and make its exact repetition unlikely. Thus, as compared with the natural phenomena, economic phenomena are of less uniform pattern, less repetitive and more variable.

Thirdly, economists study the economic phenomena in which pressure groups such as employ­ers’ associations, trade unions, farming lobby, political parties with their different ideologies play a crucial part and their activities render it difficult to make controlled experiments in the economic world. However, in spite of these difficulties, experimental method can be used in some fields.

For instance, experiments have been conducted to find out which law of production is valid, that is, whether law of diminishing returns, law of constant returns or law of increasing returns operates in the real world. Besides, public undertakings or big industrial firms often try to assess the effect of the changes in the prices of their products on the demand for it and thus find out the demand elastic­ity of their products Evaluation of Inductive Method:

As has been explained above, observations of facts through collection of detailed data and the use of statistical methods to arrive at economic generalisations establishing relationship between facts are being increasingly made.

Some of the recent researches in the field of macroeconomics, such as the nature of consumption function describing the relation between income and consump­tion, the principle of acceleration describing the factors which determine investment in the economy have been obtained through the use of mainly inductive method.

However, it needs to be emphasised again that the use of induction or empirical method is not of much value if it is not supported by the economic hypothesis or theory developed by deductive logic. The inductive method can at best be used to empirically test the theory or hypothesis as to whether it is consistent with or refuted by facts.

The inductive method has another limitation in that there is a great risk of conclusions being drawn from insufficient data. To obtain generalisations through inductive method, one should take care that sufficient number of observations or data has been taken into account.

Besides, the collection of data itself is also not an easy task. And a researcher who wants to employ the inductive method to arrive at generalisations must have good knowledge of statistical methods, that is, he must know the art of collecting, processing and inter­preting data. It is obvious that as compared with the deductive method, the inductive method is time-consuming and expensive.

ABAMUCHE LINDA C.
REG. NO.: 2019/SD/37674
QUESTIONS
1) What are the difference between macroeconomic and microeconomics?
2) Discuss the three different ways of computing GDP.
3) Without diagrams, clearly discuss the circular flow of income and product in a 2 – sector economy, 3 – sector economy and 4 – sector economy.
Macroeconomics is the branch of economics dealing with the performance, structure, behaviour and decision making of an economy as a whole. For example, using interest rates, taxes and the government spending to regulate an economy’s growth and stability. While micro economics is a branch of economics that studies the behaviour of individual unit such as households, individuals and enterprises within the economy.
Differences between Macro Economics and Micro Economics
S/N Macro economics Micro economics
1 Macro economics is the study of the whole economy Micro economics is the study of particular market
2 it loose at aggregate variables such as aggregate demand national output It looks at issues such as consumer behaviour, individual labour markets and the theory of firm.
3 macro economics is complex due to the study of large group micro economics analysis is simple
4 problems related to whole economy like employment public finance national income are included in its scope law related to marginal analysis are included in its scope.
5 it provides the information relating to national income, total output, total consumption and general price level it provides the information relating to the individual prices, individual consumption and production.

2. DISCUSS THE THREE DIFFERENT WAYS OF COMPUTING GDP.
1. Expenditure approach
2. Income approach
3. Output approach
1) Expenditure approach: This is the most widely used approach for estimating GDP, which is a measure of the economy’s output produced within a country’s borders irrespective of who owns the means of production. The GDP under this method is calculated by summing up all of the expenditures made on final goods and services.
2) Income Approach: This method comprise of the income generated from the basic factors of production or is been calculated by adding up all the factor incomes to the factors of production in the society, which includes land, labour, capital entrepreneurship or organisation. The production unit are divided into different sectors, income is calculated for each sector and summed up to arrive at net domestic product.
3) The output approach focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces. Because of the complication of the multiple stages in the production of a good or service, only the final value of a goods or services is included in the total output.

CIRCULAR FLOW IN A SIMPLE 2 – SECTOR ECONOMY
2 – sectors flow in circular economy flow in its basic form, looking at a simple economy which is made up of only households and firms. This is a two sector economy with no government. The factors owns (households) in turn spend all of their income on goods which leads to a circular flow of income and also it is assumed that all production is done by firms and the firms sell all their entire output to consumer as soon as it produced.
3 – SECTOR (CIRCULAR WITH SAVING AND INVESTMENT)
In the flow diagram, the clockwise arrows showing the flow of goods and services have been removed just to simplify the diagram, they are new 2 parts ways along which expenditures travel on their way from household to product market. Some household income is use for consumption expenditure and reaches the product market directly; other household income is directed to savings.

4 – SECTOR FLOW WITH GOVERNMENT
They are now 2 new channels along which funds can flows from households to product market. The government take in revenue from taxes they made from household, some of the revenue immediately returns to the household in form of transfer payment. Funds flow household to government as net taxes and then from government to product market as government purchase.

OKAFOR CHIOMA NANCY
REG. NO : 2020/242649
DEPARTMENT: ECONOMICS
Email : nancyokafor2000@gmail.com

METHODS OF ECONOMIC ANALYSIS
Economic analysis is simply the study of economic systems.The analysis aims to determine how effectively the economy or something within it is operating.
There are two major methods of economic analysis and they are – DEDUCTIVE AND INDUCTIVE method-

1. INDUCTIVE METHOD: This method is also known as empirical method. in this method, observations are combined with experiential information to reach a conclusion, meaning that when faced with specific sets of data we make reasonable conclusions based on existing knowledge we’ve had from previous experience.

2. DEDUCTIVE METHOD: This method is also known as priori method. In this method,we start from raw facts or assumptions and build a hypothesis or theory using basic analytical tools in order to arrive at a conclusion. This method focuses on economic reasoning as hypothesis will have to be deduced and tested before any assumption can become a theory.

Name: NNADI MARYANN AMARACHI
Reg. No: 20684723DF
Dpet: Nursing Sciences

What are the basic methods of analysis used by Economists?
An economist is a person or an expect in the study of the reasoning behind people decisions-making and have interest in data usage to conduct research that leads to boost profits or create a better public policy. In order to achieve its purpose, an economist apply some basic methods of analysis. These include the following;
1. Deductive method of analysis and
2. Inductive method of analysis

Briefly and convincingly discuss each of them
Deductive method of analysis
This is the method of analysis applying a kind of reasoning that goes from general to specific. It refers to priori reasoning. In this method, one observes a particular task or issue at hand, makes hypothesis and test the hypothesis using more observations. This analysis do not involve using any complex computer software analysis but only simple deductive logic is required to complete the task. However, as this method of reasoning begins from assumptions, when such assumptions are logically flawed, a wrong conclusions will be given.
Inductive method of analysis
This analysis uses data collected about a specific theory in economic to draw a conclusion. That is, inductive type of reasoning flows from some facts to a theory. The process involves observation, formulation of a hypothesis, generalizing principles and verifying against actual facts. This method of analysis by economist is more realistic and reliable because it is based on facts. However, when such analysis use insufficient and faulty data, it will result to a faulty conclusions.

Name:Magbo Chidimma Joy
Matric/Reg no: 2020/242674
Department: Economics Education
Course Code: Eco 101
Course title: principles of Economic
Email joychidimma961@gmail.com

Basic method of Analysis used by Economics are:
Deductive Method
Inductive Method

Explanation
1 Deductive Method: This is also called a prior reasoning. It starts from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusion ( building hypothesis using logical analyze or out own analysis or ablities. In this kind of reasoning we go from general to specific.
Stage in deductive Method are
1 observations on a task/ issue
2 making the hypothesis
3 Testing the hypothesis using more observation

Advantages of Deductive Method
1 it is a simple method, it doesn’t involve the uses of any complex software analysis.
2 This methods focuses more on Economic reasoning which is of paramount importance to Economists
Disadvantages of Deductive Method
i the method of reasoning start from assumptions thus if the assumptions is logical flawed the whole process becomes Faulty and would give wrong conclusion.

2 Inductive Method: This methods of reasoning flows from facts to theory. This method formulates principles using this sub-method: observations, Experimations, statistical method.
The stages in this method are:
i Observation
ii Formulation of hypothesis.
iii Generalising principles
iv Verifying against actual facts

Advantages of inductive Method
i since it is based on facts it is more realiable
ii using statistica methods and experimentation makes the process more scientific this making it more universally acceptable
Disadvantages of inductive Method
i The collection of all the data is not an easy Job and varies from person. As to how they collect data
ii it is time consuming and thus expensive as well

ABAMUCHE AGATHA NKIRU
REG. NO.: 2019/SD/37673
Question
1) What are the difference between macroeconomic and microeconomics?
2) Discuss the three different ways of computing GDP.
3) Without diagrams, clearly discuss the circular flow of income and product in a 2 – sector economy, 3 – sector economy and 4 – sector economy.
Micro economics is the study of indivisible units of an economy. It is also the study of an economy in a disaggregated form while macro economics is the branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.
DIFFERENCES BETWEEN MICRO AND MACRO ECONOMICS
S/N Micro Macro
1 micro economics studies the income of an individual macro economics studies about the national income
2 micro economics concerns itself decisions of individuals and business decision macro analyzes the decisions that are made by countries and government.
3 micro economics adopts a bottom-up approach. It focuses on the demand and the supply and other forces that play out in the price levels macro economics adopts a top down approach. It looks into the policies and decisions that influence the direction taken by other players in the economy
4 micro economics engages in the study of the behaviours of individuals forms, and households in a given with regards to how they make both ends meet macro economics looks at the economy in its entirely. It examines how the various forces interact and engage at a larger level like the region, the nation and the entire globe.
5 investors can use micro economics in the investment decision macro economics is an analytical tool mainly used to craft economic and fiscal policy

The expenditure approach
The output approach or production
The income approach
The expenditure approach also known as spending approach calculates spending by eth different groups that participate in the economy. The U.S. is primarily measured based on the expenditure approach.
The approach can be calculated using the following formula
GDP = C + G + I + NX
Where
C = consumption
G = government spending
I = Investment
NX = net exports
The output or production Approach: The production approach is essentially the reverse of the expenditure approach. Instead of measuring the input costs that contribute to economic activity, the production approach estimates the total value of economic output and deducts the cost of intermediate goods that are consumed in the process.
The Income Approach: The income approach represents a kind of middle ground between the two other approaches to calculate GDP. The income approach calculates the income earned by all the factors of production in an economy.
THE CIRCULAR FLOW IN A SIMPLE (2 SECTOR) ECONOMY
In this type of economy, it is assumed that household spend all their incomes on consumer’s goods as soon as the income is received. All consumption is assured to take place in the household. This means that the business sector does not consume finished goods. It is also assumed that all production is done by firms and the firms sell all their entire output to consumers as soon as it is produced.
CIRCULAR FLOW WITH SAVINGS AND INVESTMENT (3 – SECTOR) ECONOMY
Some household income is use for consumption expenditure and reaches the product market directly, other household income is indirected to savings and this is a source of funds for firms to use in making investment expenditure. The income reaches product market directly. On the way from household to firms, the flow of savings pass through a set of financial market.
CIRCULAR FLOW WITH GOVERNMENT (4 – SECTOR)
The government take in revenue from taxes they made from households, some of the revenue immediately returns to the household in the form of transfer payment. The government collect tax as revenue and pay out as transfer payment and it is called net taxes. Funds flows from household to government as net taxes and then from government to product market as government purchases.

What are the basic methods of analysis used by Economists?
An economist is a person or an expect in the study of the reasoning behind people decisions-making and have interest in data usage to conduct research that leads to boost profits or create a better public policy. In order to achieve its purpose, an economist apply some basic methods of analysis. These include the following;
1. Deductive method of analysis and
2. Inductive method of analysis

Briefly and convincingly discuss each of them
Deductive method of analysis
This is the method of analysis applying a kind of reasoning that goes from general to specific. It refers to priori reasoning. In this method, one observes a particular task or issue at hand, makes hypothesis and test the hypothesis using more observations. This analysis do not involve using any complex computer software analysis but only simple deductive logic is required to complete the task. However, as this method of reasoning begins from assumptions, when such assumptions are logically flawed, a wrong conclusions will be given.
Inductive method of analysis
This analysis uses data collected about a specific theory in economic to draw a conclusion. That is, inductive type of reasoning flows from some facts to a theory. The process involves observation, formulation of a hypothesis, generalizing principles and verifying against actual facts. This method of analysis by economist is more realistic and reliable because it is based on facts. However, when such analysis use insufficient and faulty data, it will result to a faulty conclusions.

NAME-Edeh loveth ifeoma
Department- combined social science
( economic/political science)
MATRIC Number- 2020/242988
Email- ifeomaloveth33@gmail.com
METHOD OF ECONOMIC ANALYSIS
1; DEDUCTIVE METHOD- we shall first explain the Deductive method of deriving economic generalisation. The Deductive method is also called abstract, analytical and a prior method and represent an abstract approach to the derivation of economic generalisation and theories. With the aid of rigorous mathematical logic, economic theories can be developed through the process of deduction which can successfully explain economic phenomena.through Deductive logic useful economic theories can be derived without collection and analysis of data which are required under inductive method,this as compared to inductive method deduction is less time consuming and less expensive. The sophisticated mathematical method in the Deductive approach enables the economist to introduce accuracy and exactness in economic principle and theories.
2; INDUCTIVE METHOD- This inductive method which is also called empirical method derived economic generalisation on the basic of experience observation.
In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisation which follow from the observation collected. The main step involved in the application of inductive method are
Observation
Formation of hypothesis
Generalisation
Verification
Inductive method is based on fact as such the method is realistic and this method is dynamic, the changing economic phenomenon are analyzed and on the collected data.conclusion and solution are drawn from them and this method also help in future investigation.

NAME: Ugwuanyi Sunday Chetachi
REG. NO: 20686711HA
DEPARTMENT: Public Administration And Local Government
COURSE CODE: Eco.101
COURSE TITLE: Principles of Economics

Question: What are the basic methods of analysis used by Economists? Briefly and convincingly discuss each of them.

Basically, in Economic analysis theories obtain generalizations or laws through two methods;
A. Deductive method or Analytical Abstract method
B. Inductive method or Empirical method

DEDUCTIVE METHOD
This method of economic of Economic Analysis reach conclusion by taking and applying general or wildly accepted principles. it consists of gaining conclusions from general truth;
there are several steps involved in deductive Analysis. they include:
I. perception of the problem to be inquired into.
II. defining of terms
III. deducing hypothesis from the assumption.
iv. testing of hypothesis
This method is less time consuming and less expensive. it brings exactness and clarity in economic analysis due to the use of mathematical techniques.
On the other hand, the deductive method is highly abstract. it requires a great deal of care to avoid bad logic or faulty economic reasoning.

INDUCTIVE METHOD OR EMPIRICAL METHOD
This method entails the process of reasoning from particular facts to general principles. it was adopted by the historical school of Economists.
In this method of Economic Analysis, Economic generalization is gained on the basis of the following;
i. experimentation
ii.observations
iii.statistical methods.
There are four main steps involved in this method, which include; observation, formation of hypothesis, Generalization and verification.
this method is realistic due to the fact that it is based on facts. it is also dynamic and reliable. On the other hand, this method is time-consuming and expensive. Generalization obtained through this method may be faulty if the conclusion is drawn from insufficient data.

Name: Okoloaja Vanessa Mmerichukwu
Reg no:21320516FF
Email: Mmerichukwunessa77@gmail.com
1. Deductive method: The deductive of economic analysis also known deductive logic entails the movement from general to particular reasoning,it is also known as an hypothetical method . The deductive reasoning provides generalisation that must have been tested and verified in order to have relevance to the facts. There are various steps in deductive logic (identify the problem,defining the technical terms, deducing hypotheses and testing or verification of hypotheses )
Advantages:
1. Deductive method is easy to comprehend : Looking at the law of utility, law of demand and other theories,it is a self evident that we can easily draw conclusions from the theories
2. It gives accruacy and exactness: In generalisation, deductive logic gives a very high standard of precision in abstract economic reasoning.
Disadvantage:
1. The deductive logic has its own drawback because of its too much abstraction, thereby having little or no connection to real

2. Inductive: The method moves from particular to general reasoning, it is carried out in two forms, experimentation and statistical forms. The statistical branch of inductive reasoning plays a greater role on economic investigation, looking at the Malthusian theory of population (Rev. Thomas Malthus) he used statistics to show relationship between (food to population and population to food)
Advantages:
1. It is highly practical and realistic
2. It is helpful in verifying conclusions
Disdavantage:
1. Collection of facts in the inductive logic is difficult and complicated.
In conclusion, the two methods should not be used for competition but should be used to complement each other in the discipline of economics.

NAME:ONYEFULU CHIAMAKA LILIAN
MATRICULATION NUMBER: 2018/250299
DEPARTMENT: NURSING SCIENCES
FACULTY: HEALTH SCIENCES AND TECHNOLOGY

QUESTIONS: METHODS OF ECONOMICS ANALYSIS

Economic analysis: can be defined as an economic operation that involves the formulation of laws

There are basically two methods of economics analysis
1. Deductive method
2. Inductive method

DEDUCTIVE METHOD: Is also called abstract, analytical and prior method and represents an abstract approach to derivation of economics generalization through deductive logic

STEPS USED IN DEDUCTIVE METHOD OF ECONOMICS ANALYSIS

1. Perception of the problem: In any scientific research, the analyst must have a clear idea of the problem to be researched on. There must be liable variables in which his generalization will depend on.

2. Precise definition of technical terms and making assumptions: This involves simple definition of various technical terms related and to be used in the analysis and this clearly states the assumptions. Assumptions maybe behavioral pertaining to the behavior of the economics variables.

3. Deduction of hypotheses: Hypotheses are deduced from the assumptions or premises taken, Hypothesis explains relationships between factors affecting a phenomenon.

4. Testing of deduced d hypotheses: This means checking, analyzing and lastly verification of the hypothesis, when verified it can be established as generalization.

INDUCTIVE METHOD OF ECONOMICS ANALYSIS:- It can also be called empirical method, it serves economics generalization based on experiences and observations. It does not accommodate few observations, It can only be done when large observations has been made, it uses statistical or econometric methods.

STEPS USED IN INDUCTIVE METHOD OF ECONOMICS ANALYSIS

1. Perception of the problem: In any scientific research, the economist must have a clear idea of the problem-to be researched on. There must be liable variables in which his generalization will depend on.

2. Precise definition of technical terms and making assumptions: This involves simple definition of various technical terms related and to be used in the analysis and this clearly states the assumptions. Assumptions can also be called postulate

3. Collection of data: There will be collection of data about the variables related to the problems, as to gather large observations for the analysis.

4. Processing of data collected: Finding out the relations between variables and doing some preliminary thinking ways to relate and the variables.

5. Deduction of hypotheses: Hypotheses are deduced from the assumptions or premises taken, Hypothesis explains relationships between factors affecting a phenomenon, it shows clearly the relationship that correlates.

6. Testing of deduced d hypotheses: This means checking, analyzing and lastly verification of the hypothesis, when verified it can be established as generalization.

NAME. OGUANYA CHIDERA FAITH
DEP ECONOMICS
REG NO.21462736DA
chideraoguanya@gmail.com

BASIC METHODS OF ECONOMIC ANALYSIS

1. Deductive method.
2. Inductive method.

Deductive- also known as the abstract method, analytical approach and a priori method. It represents an abstract approach to the derivation of economic generalization and theories. The principles of deriving economic generalizations through deductive logic are (a) defining precisely the technical terms and making approapiate assumptions often called postulates or premites.then the deducing hypothesis, that is deriving conclusion from the premises through the process of logical reasoning and finally the testing of hypothesis deduced.

2. Inductive- this is also called empirical method. This method derives economic generalizations on the basis of experience and observations. In this method, dedailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalizations which follows from the observations collected. The steps here are (a) Experimentation….(b) observation and statistical or econometric method.

Methods of Economic Analysis
Some of the most important methods of economic analysis are as follows:
1. Deductive Method
2. Inductive Method.
Economic generalizations describe the laws or statements of tendencies in various branches of economics such as production, consumption, exchange and distribution of in­come. In the view of Robbins, economic generalizations or laws are statements of uniformities which describe human behavior in the allocation of scarce resources between alternative ends.
The generalizations of economics like the laws of other sciences, state cause and effect relation­ships between variables and describe those economic hypotheses which have been found consistent with facts or, in other words, have been found to be true by empirical evidence. But a distinction may be drawn between a generalization (law) and a theory.
A law or generalization just describes the relationship between variables; it does not provide any explanation of the described relation. On the other hand, a theory provides an explanation of the stated relation between the variables, that is, it brings out the logical basis of the generalization. An economic theory or a model derives a generalization through process of logical reasoning and explains the conditions under which the stated generalization will hold true.
1. Deductive Method:
Genera
We shall first explain the deductive method of deriving economic generalizations. The deductive method is also called abstract, analytical and a priori method and represents an abstract approach to the derivation of economic generalizations and theories.
In any scientific enquiry, the analyst or theorist must have a clear idea of the problem to be enquired into. He must know the significant variables regarding whose behavior and interrelationship he wants to derive generalizations. The perception of the problem is by no means an easy task.
(a) Definition of Technical Terms and Making of Assumptions:
The next step in the process of deriving economic generalizations is to define precisely and unambiguously the various technical terms to be used in the analysis as well as to state clearly the assumptions he makes to derive generalizations.
As mentioned above, assumptions may be behavioral pertaining to the behavior of the economic variables or they may be technological relating to the state of technology and the factor endowments. The crucial assumptions are made on the basis of observations or introspection.
A crucial assumption that has been taken in economics is that consumers try to maximize their satisfaction and producers try to maximize their profits. Likewise, it is assumed that investors try to minimize their risk and maximize the expected rate of their profits. Some of the assumptions are made merely to simplify the analysis and may not be quite realistic.
The actual economic world is quite complex and full of details in which numerous factors play a part and act and interact on each other. The introduction of simplifying assumptions is quite necessary in order to bring out the importance of really significant factors having a bearing on the problem under investigation.
It, therefore, follows that each and every assumption made by a theory may not be realistic. The crucial factor in building up a valid theory is whether its predictions are corroborated by the facts in the world. A correct scientific theory or generalization must be expressed in the form of a hypothesis that is conceivably refutable.
(b) Deducing Hypotheses through Logical Deduction:
The next step in deriving generalizations through deductive logic is deducing hypotheses from the assumptions or premises taken. A hypothesis describes relationship between factors affecting a phenomenon; it establishes the cause and effect relationship between the variables having a bearing on the phenomenon.
Then, through logical process, hypothesis is deduced from the assumptions made. This logical reasoning may be carried out verbally or it may be conducted in symbolic terms using the language of what is known as symbolic logic.
The geometric or graphic technique is also usually employed to deduce the hypotheses about the relationship between factors. Besides, the process of logical deduction may be done with the help of more formal mathematics.
These days in almost all branches of modern economics, mathematics as tool of analysis for deriving economic theories and generalisations is being increasingly used. The use of mathematics in economic analysis proves extremely useful where geometrical methods make the analysis more complicated to comprehend. Besides, the use of mathematical method makes the derivation of economic hypotheses more rigorous and exact.
It is worthwhile to note that in deriving analytically sound hypotheses, one should guard against committing logical fallacy in the process of logical deduction. For instance, it is inappropriate to conclude that A must be the cause of B, if A happens to precede B.
Further, it is logically fallacious to argue that since there exists a high degree of correlation between the two factors, say between the supply of money and the general price level, the former must be the cause of the latter, unless the causation must be logically developed.
(c) Testing or Verification of Hypotheses:
Hypotheses obtained above have to be verified before they are established as generalizations or principles of economics. For the verification of hypotheses, economists cannot make controlled experiments, because they have to discover unifor­mities in behavior patterns of man.
We cannot make experiments with man under controlled con­ditions, such as in laboratories as physical scientists make experiments with inanimate objects of nature and biologists make these with animals and plants. Therefore, economists have to rely on uncontrolled experience and observations.
The information regarding uncontrolled experience about the behaviour patterns concerning variables about man and the economy are quite amply available. The reliance by economists on uncontrolled experiences, however, does increase the number of observations required to verify the hypotheses or to establish the generalizations.
Besides, the need to rely on uncontrolled experiences complicates the analysis and requires that facts must be carefully interpreted to discover successfully the significant relationship between relevant economic variables.
It may, however, be pointed out that in spite of the complexities and difficulties involved in verifying economic hypotheses through successful analysis and proper interpretation of uncontrolled experiences and observations, several useful and significant generalizations have been established in economics.
In the field of microeconomics, the well-established generalizations relate to the in­verse relationship between price and quantity demanded, the direct relation between price and quan­tity supplied, the tendency of the price of the product to be equal to the marginal cost under condi­tions of perfect competition, and the tendency for the wages to be equal to the value of marginal product under conditions of perfect competition and several others.
In the field of macro-econom­ics, established generalizations relate to the determination of the level of national income by aggre­gate demand and aggregate supply in a capitalist economy, the multiple increase in income and employment as a result of a given initial increase in investment depending upon the size of marginal propensity to consume, the dependence of the amount of investment on the marginal efficiency of capital and the rate of interest and several others.
It is worth noting that the absence of controlled experiments in economics affects the exactness of economic laws and generalizations.’ This means that the generalizations in economics are not as exact as those of physical sciences and they are therefore not universally applicable under all cir­cumstances. Because of the absence of controlled experiments economic generalizations lack in firmness, they are not easily accepted by all and even generalizations that are refuted by empirical evidence are not abandoned for good by all.
In regard to flaming and testing of economic generalizations, two related distinctions must be borne in mind. First, functional relationship between economic variables and a historically se­quence of events must be distinguished.
For instance, the law of demand stating inverse relationship between price and quantity demanded does not become invalid in view of the fact that both prices and quantities sold of many commodities increase during boom periods. This is because certain other forces such as a rise in aggregate investment demand operates which causes increase in both the price and quantity sold during a boom period.
Second, prediction of a generalization to show its validity must be carefully differentiated from the forecasting of future events; actual events may not exactly come about as predicted by a generalization and yet that generalization may be correct. This is because, as mentioned above, the actual course of events is governed by several other factors assumed by a generalization which remains constant under the qualification “other things remaining the same.
In the absence of controlled experiments, for the verification of their theories economists have to rely on the direct observations of events in the real world. By direct observations we mean. gathering of information personally or reliance on comparatively unprocessed material such as files of business firms and government departments, locally published reports, proceedings of representative assemblies, newspapers, advertisements, market reports, auction notices and the like.
In order to prove the validity of hypotheses and therefore to establish laws or generalizations, importance of direct observations cannot be underrated.
Testing of Economic Hypotheses through Statistical Methods:
In recent years a very useful method to test economic hypothesis has been developed. This is the statistical method or what is now popularly called econometric method. The statistical or econometric method to verify and establish the theoretical generalizations occupies an important place because of the limited applicability of controlled experimentation in economics.
The various statistical methods such as regression analysis have been developed to empirically test the economic hypotheses on the basis of collected economic data. The merit of econometrics is that the degree of functional relationship between relevant economic variables in precise quantitative terms is obtained by it and also the level of significance of the results can also be estimated.
Recently, econometric method has been used to establish the precise relationships between money supply and the price level, quantity of money and the national income, consumption and income, capital accumulation and rate of economic growth and so forth.
It may, however, be pointed out that statistical analysis or econometrics alone cannot be used to derive and establish economic principles and theories. Economic hypotheses or theories must be developed logically before we can meaningfully use statistical analysis to test and verify them.
Indeed, a theory or hypothesis is needed beforehand for selecting the relevant facts and data regarding relevant variables which can be subjected to empirical testing through the methods of econometrics
Facts come to mean something only as ascertained and organized in the frame of a theory. Indeed, facts as part of scientific knowledge have no existence outside such a frame Questions must be asked before answers can be obtained and, in order to make sense, the questions must be part of a logical coordinated attempt to understand social reality as a whole. A non- theoretical approach is, in strict logic, unthinkable. Principal steps followed in formulation of economic theories and generalizations through de­ductive method can be summarized as given below.
Merits and Demerits of Deductive Method:
The deductive approach to establish economic generalizations was extensively used by Classi­cal and Neo-Classical economists such as Ricardo, Malthus, Senior, J. S. Mill, Marx, Marshall and Pigou. It still remains popular with modem economists as it has several merits. First, useful math­ematical techniques can be employed to derive laws and theories of economics.
With the aid of rigorous mathematical logic, economic theories can be developed through the process of deduction which can successfully explain economic phenomena. Secondly, through deductive logic useful economic theories can be derived without the tenuous and detailed collection and analysis of data which are required under the inductive method.
Thus, as compared to inductive method, deduction is less time-consuming and less expensive. Thirdly, in view of the limited scope for controlled experimentation in economics, the method of deduction is extremely useful method of constructing economic theories. This is because several forces act simultaneously on an economic phenomenon and it is not possible to eliminate some of these by means of a controlled experiment.
This indicates the crucial importance of deductive logic for building up economic principles or theories. Fourthly, the use of sophisticated mathematical methods in the deductive approach enables the economists to introduce accuracy and exactness in economic principles and theories.
In spite of the above-mentioned merits, shortcomings of the deductive approach should not be overlooked. The use of deductive method in deriving economic generalizations requires the use of a high-level competence in logic and theoretical abstraction.
Besides, most economists have preconceived notions or biases on several economic issues. If sound and valid economic generalizations are to be established, economists must dissociate themselves from normative preconceptions and biases in their logical process of deducing economic generalizations.
Further, a great demerit of deductive approach is that with it highly sophisticated theoretical models based on highly unrealistic assumptions may be developed which do not have any operational significance. Indeed, such highly irrelevant analytical models with little empirical content and incapable of being used for policy formulation have in fact been developed by economists. Such models are no more than mere “intellectual toys”. If economics is to serve as an instrument of social betterment, building of such theoretical models having no opera­tional use should be avoided.
Lastly, in the derivation of economic hypotheses and conclusions through deductive logic, as­sumptions play a crucial role. If the assumptions made are such that when on removing them, economic hypothesis based on them is refuted, then making of these assumptions is not valid.
Thus, one who uses deductive approach should always keep in mind to what extent the validity of generalizations derived depends on the assumptions made. For instance, the Keynesian macroeconomic analysis is based upon the assumption of a depression-ridden capitalist economy with a lot of excess productive capacity.
Therefore, a positive harm has been done in applying the Keynesian theories in the context of developing countries such as ours where the assumptions made by Keynes do not hold good. Hence, mere “deductive arm-chair analysis” should be avoided, if the scientific character of economics is to be maintained.
2. Inductive Method:
The inductive method which is also called empirical method derives economic generalizations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalizations which follow from the observations collected.
But, it is worth mentioning that the number of observations has to be large if it can yield a valid economic generalization. One should not generalize on the basis of a very few observations. There are three ways which can be used for deriving economic prin­ciples and theories.
They are:
• Experimentation,
• Observations,
• statistical or econometric method.
As has been mentioned above, the experimentation, that is, the use of contrived experi­ments is of limited applicability in economics. First, unlike natural sciences which are concerned with analyzing the behavior of either inanimate objects or obedient animals such as rats and rabbits under the influence of chloroform, economics deals with the behavior of man who is quite fickle, wayward and unmanageable.
Besides, man cannot tolerate the idea of being experimented upon, either individually or collectively. Secondly, an economic phenomenon is the result of multiplicity of factors and causes acting and interacting upon each other.
Therefore, economic phenomenon does not repeat itself in the same uniform pattern. Numerous factors acting on an economic phe­nomenon ‘disturb’ it and make its exact repetition unlikely. Thus, as compared with the natural phenomena, economic phenomena are of less uniform pattern, less repetitive and more variable.
Thirdly, economists study the economic phenomena in which pressure groups such as employ­ers’ associations, trade unions, farming lobby, political parties with their different ideologies play a crucial part and their activities render it difficult to make controlled experiments in the economic world. However, in spite of these difficulties, experimental method can be used in some fields.
For instance, experiments have been conducted to find out which law of production is valid, that is, whether law of diminishing returns, law of constant returns or law of increasing returns operates in the real world. Besides, public undertakings or big industrial firms often try to assess the effect of the changes in the prices of their products on the demand for it and thus find out the demand elastic­ity of their products.
Various Steps in Inductive Method:
Various steps are gone through in developing economic theories through inductive method. The first step, as in the deductive approach, is to identify the problem. The second step is defining technical terms and variables related to the problem.
It is the next step which is peculiar to the inductive method, namely, the collection of data about the variables related to the problem and doing some preliminary thinking about the possible functional relationships between the relevant variables.
The next important step in the construction of economic theories in this method is the processing of data collected and finding out what relations between the variables actually hold good. From this, a theory is developed which can be further refined and tested through statistical methods.
Once the theory has been developed one can make predictions on its basis, as is done in the deductive approach. If predictions of theory are in agreement with the facts and actual behavior of the economy, then a new reliable theory has been developed. If a new theory explains “how things work” better than the existing ones, it replaces them.
However, if predictions are in conflict with actual facts and behavior of the economy, either the theory is discarded or fresh efforts are made to modify and refine it by collecting more data and processing them. The various steps in the construction and development of economic theories through inductive method are illustrated in Figure.
Evaluation of Inductive Method:
As has been explained above, observations of facts through collection of detailed data and the use of statistical methods to arrive at economic generalizations establishing relationship between facts are being increasingly made.
Some of the recent researches in the field of macroeconomics, such as the nature of consumption function describing the relation between income and consump­tion, the principle of acceleration describing the factors which determine investment in the economy have been obtained through the use of mainly inductive method.
However, it needs to be emphasized again that the use of induction or empirical method is not of much value if it is not supported by the economic hypothesis or theory developed by deductive logic. The inductive method can at best be used to empirically test the theory or hypothesis as to whether it is consistent with or refuted by facts.
The inductive method has another limitation in that there is a great risk of conclusions being drawn from insufficient data. To obtain generalizations through inductive method, one should take care that sufficient number of observations or data has been taken into account.
Besides, the collection of data itself is also not an easy task. And a researcher who wants to employ the inductive method to arrive at generalizations must have good knowledge of statistical methods, that is, he must know the art of collecting, processing and inter­preting data. It is obvious that as compared with the deductive method, the inductive method is time-consuming and expensive.
Conclusion: Integration of Two Methods:
Now, the controversy which existed among the earlier economists as to whether deductive or inductive approach is more appropriate in developing economic theories and principles has been resolved. The modem viewpoint in this regard is that both are needed for the proper development of scientific economic theories. Indeed, the two are complementary rather than competitive.
The modern economists first derive economic hypotheses through the process of logical deduction and then empirically test them through statistical or econometric methods. Marshall rightly pointed out, “induction and deduction are both needed for scientific thought as the right and left foot are both needed for walking.
Empirical studies made through statistical or inductive method without a theoretical hypothesis to serve as a guide for the selection of data are quite useless. The derivation of economic generalisations through the approach of deductive logic without empirically testing them through inductive method is also not quite proper.
Empirical studies made in inductive ap­proach also bring to light significant economic facts or phenomena which require analytical expla­nation through deductive logic. For instance. Farm Management Studies in India in the mid- fifties led to the discovery of a fact that output per acre on the small-sized farms is higher than that on large farms.
This led to the various theoretical explanations of the phenomenon observed in the empirical studies. On the other hand, a theory or hypothesis is first developed through deductive logic from some assumptions and then predictions based on the hypothesis are tested through inductive or statistical method. If the predictions are found to be constant with facts, the hypothesis or theory stands proved and if the predictions of the theory are found to be inconsistent with facts, it stands rejected.

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METHODS OF ECONOMICS ANALYSIS

Deductive Method
This is can also be defined as priori reasoning. It start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning are:

Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

Advantages of Deductive Method
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.
Disadvantages of Deductive Method

In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

Inductive Methods

Inductive Method
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods.

Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method are:

Observation
Formulation of a hypothesis
Generalizing principles
Verifying against actual facts.

Advantages of Inductive Method
Since it is based on facts it is more realistic and reliable.
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.

Disadvantages of Inductive Method
If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable.
It is a time-consuming process and thus expensive as well.
The collection of all the data is not an easy job and varies from person to person. As to how they collect data.

WHAT ARE THE BASIC METHODS OF ANALYSIS USED BY ECONOMIST? BRIEFLY AND CONVINCING DISCUSS EACH OF THEM
The basic method of analysis used by economists are;
1-Deductive method
it can also be known as the analytical abstract,a prior method or hypothetical method,its derives the conclusion From fundamental assumption or from the truth.establish by other methods;its involves the process of reasoning from certain law or Principe which are assumed to be true to the analysis of the facts.The inference are drawn which are verified against observe facts.

2- Inductive Method
In this method the specific observation and measure,its bring to detect patterns and regulations formulate some tentative hypotheses that we can explore and finally end up developing some general conclusion or theories.in this case also the gulf can be reduce by economists that proceed from a practical angle to problem of science between practice and it’s done by two forms, experimentation and statiscal forms.

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Methods of economic Analysis
1. Deductive method
2. Inductive method
Deductive method: deductive method is the theoretical deduction that is considered to be true without being based on observations and experience .it is also know as analytical, abstracts and priori methods
Steps used in deriving generalisation in deductive method
1. Perception of the problem to be enquired into
2. Finding precisely the technical terms
3. Deduction of hypothesis
4. Testing the hypothesis

Inductive methods: inductive methods derives economic generalisation on the basis of experience and observations. Inductive methods is also know as empirical methods and it makes use of econometric packages to run their experiment.
Theories used in generalisation of inductive methods
1. Experimentation
2.observations
3. Statistical or econometric methods

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Methods of economics Analysis are;
1)Deductive analysis
2)Inductive analysis

1) Deductive analysis: This is concerned with ” developing hypothesis (or hypotheses) based in existing theory and then designing a research strategy to test the hypothesis
It has been stated that Deductive means reasoning from the particular to the general. If a casual relationship or link did obtain on more general circumstances
Deductive approach can be explained by the means of hypothesis,which can be derived from the prepositions of the theory .In other words Deductive approach is concerned with deducting conclusions from premises or prepositions. Deductive begins with an expected pattern ” that is tested against observations whereas induction begins with observations and seeks to find a pattern within them”.

2) Inductive analysis: This refers to approaches that primarily use detailed readings of raw data to derive concepts,themes or a model through interpretations made from the raw data by a researcher. The general Inductive approach provides an easily used and systematic set of procedures for analyzing qualitative data that can produce reliable and valid findings. Although the general Inductive approach is not strong as some analytic strategies for theory or model development,it does provide a simple, straight forward approach for deriving findings in the context of focused evaluation questions. Many evaluation are likely to find using a general Inductive approach less complicated than using other approaches to qualitative data analysis.

Economic analysis involves the formulation of laws and generalization and it is achieved through the methods of Deductive Analysis and Inductive Analysis. The Deductive method also referred to as priori starts from unchallenged elementary or rudimentary assumptions and then arrives at conclusions using logical analysis or our analytical abilities. This is achieved through different stages which includes; (I) Observation of task, (ii) Making the hypothesis, and (iii) Testing the hypothesis using more observation. It is a simple method that doesn’t involve the use of any complex software analysis. Inductive method of analysis is the type that flows from facts to theory. Informations and facts are first collected and then evidence are provided using economic theory and facts. It involves other methods , namely ; observations, experimentation, and statisticalmethods in formulation of principles. Since it is based on facts, it is more realistic and reliable.

Economic analysis involves the formulation of laws and generalization and it is achieved through the methods of Deductive Analysis and Inductive Analysis.
The Deductive method also referred to as priori starts from unchallenged elementary or rudimentary assumptions and then arrives at conclusions using logical analysis or our analytical abilities. This is achieved through different stages which includes; (I) Observation of task, (ii) Making the hypothesis, and (iii) Testing the hypothesis using more observation. It is a simple method that doesn’t involve the use of any complex software analysis.
Inductive method of analysis is the type that flows from facts to theory. Informations and facts are first collected and then evidence are provided using economic theory and facts. It involves other methods , namely ; observations, experimentation, and statisticalmethods in formulation of principles. Since it is based on facts, it is more realistic and reliable.

WHAT ARE THE BASIC METHODS OF ANALYSIS USED BY ECONOMIST? BRIEFLY AND CONVINCING DISCUSS EACH OF THEM
The basic method of analysis used by economists are;
1-Deductive method
it can also be known as the analytical abstract,a prior method or hypothetical method,its derives the conclusion From fundamental assumption or from the truth.establish by other methods;its involves the process of reasoning from certain law or Principe which are assumed to be true to the analysis of the facts.The inference are drawn which are verified against observe facts.

2- Inductive Method
In this method the specific observation and measure,its bring to detect patterns and regulations formulate some tentative hypotheses that we can explore and finally end up developing some general conclusion or theories.in this case also the gulf can be reduce by economists that proceed from a practical angle to problem of science between practice and it’s done by two forms, experimentation and statiscal forms.

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METHODS OF ECONOMIC ANALYSIS
1. Inductive Method
Inductive method which also called empirical method was adopted by the “Historical School of Economists” It involves the process of reasoning from particular facts to general principle,This method derives economic generalizations on the basis of
*Experimentations
*Observations
*Statistical methods
In this method data is collected about a certain economic phenomenon These are systematically arranged and the general conclusions are drawn from them,For example, we observe 200 persons in the market We find that nearly 195 persons buy from the cheapest shops Out of the 5 which remains 4 persons buy local products even at higher rate just to patronize their own products while the fifth is a nonentity From this observation, we can easily draw conclusions that people like to buy from a cheaper shop unless they are guided by patriotism or they are devoid of common sense.
Steps of Inductive Method
i. Observation
ii. Formation of hypothesis
iii. Generalization
iv. Verification
Merits of Inductive Method
i. It is based on facts as such the method is realistic.
ii. In order to test the economic principles, method makes statistical techniques.
iii. Induction method also helps in future investigation.
Demerits of Inductive Method
i. If conclusions drawn from insufficient data, the generalizations obtained may be faulty.
ii. The inductive method is time-consuming and expensive.

2. Deductive Method
The deductive method is also named as analytical, abstract or prior method. The deductive method consists in deriving conclusions from general truths, takes few general principles and applies them draw conclusions.
Steps of Deductive Method
*Perception of the problem to be inquired into
*Defining of terms
*Deducing hypothesis from the assumptions
*Testing of hypothesis
Merits of Deductive Method
i. This method is near to reality. It is less time consuming and less expensive
ii. The use of mathematical techniques in deducing theories of economics brings exactness and clarity in economic analysis
iii. The method is simple because it is analytical

Demerits of Deductive Method
i. The deductive method is simple and precise only if the underlying assumptions are valid
ii. The deductive method is highly abstract. It require; a great deal of care to avoid bad logic or faulty economic reasoning

Method of economics analysis:
An economic analysis involves the formulation of laws and generations through two method deductiveand inductive method
1:Deductivemethod.: known as abstract or analytical method.the deductive method consist in deriving conclusion from general all truth only few principle applies them conclusion for instance: if we accept the general proposition that man is entirely motivated by self interest in applying the deductive method of economic analysis ,we proceed from general to particular.step involves in deductive method (a). testing of hypothesis (b) defining of terms etc.
2: inductive method: which is also called empirical method was adopted by the historical school of economist it involves the process of reasoning from particular facts to general principle .this method derives economics generalization on the basis. 1) experimentation 2) observation and statistical method in this method data is collected about a certain economic phenomenon these systematically arranged and the general conclusion are drawn from them step involved are observation:
*Observation
*Generaralization and formation of hypothesis
*Generalizations

Okelekwe Chiamaka Mediatrix
Department of Economics
2020/242609
Qs: Briefly discuss on the basic method of economic analysis
Answer:
There mainly two basic method of economic analysis
1. Deductive analysis
2. Inductive analysis

1. Deductive analysis: also called prori reasoning. It starts from unchallenged elementary or rudimentary assumptions or facts and then arrive at conclusions using logical analysis. It usually goes from general to specific. The stages involved are:
a. Observation of a task
b. Making hypothesis
c. Testing the hypothesis using more observations
There are advantages and disadvantages using this method
Advantages: it is a simple method that doesn’t involve the use of a complex software analysis. It is also good for economists as it only involves the use of economic reasoning.
Disadvantages: This method of reasoning starts from mere assumptions which can be logically flawed which then makes it unreliable for use.

2. Inductive method: this type of reasoning flows from facts to thoery. First of all, there is collection of information and facts and then moving towards providing evidence using economic theory and facts. The stages are:
a. Observation
b. Formulation
c. Generalizing principle
d. Verifying against actual fact.
There are also advantages and disaOkelekwe Chiamaka Mediatrixdvantages of using this method
Advantages: since it based in facts is more reliable and realistic. More so, seeing that it uses statistical method of experiment, the process is scientific.
Disadvantages: if the data collected is insufficient and faulty then the conclusion cannot be trusted. It is also expensive and time consuming.

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COURSE TITLE: PRINCIPLES OF ECONOMICS

Deductive method a way of reasoning whereby a new true statement is formulated from several true statements (assumptions) following the rules of logic. Deductive reasoning has a status of proof. In the wide sense, deductive method is a cognitive operation in which new knowledge is logically obtained from a system of available certified knowledge. Deductive method is the main method of investigation in economics.

Inductive method is method of reasoning based on empirical observations. It allows for conclusions about the whole to be drawn based on evidence to given by samples(certain economic phenomenon). Simply put, it allows one to reason from the parts to establish the whole.

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The economics methods are:
a. Inductive method and
b. Deductive method
A..Inductive Method:
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical method.
b. Deductive method of economic analysis involves the process of reasoning analytical and inferring what must necessary follow from a given set of statement that the present will be like the past and the future will be like the present thought not full assured as change remain constant.

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Department: Sociology & Anthropology
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METHODS OF ECONOMIC ANALYSIS
Every economic analysis necessitate the articulation of laws and conceptions through two methods:
– Deductive reasoning.
-Inductive reasoning.

DEDUCTIVE REASONING
It begins from undisputed straightforward or introductory facts and then results to resolutions ( construct a hypothesis or theory) using logical analysis or our own analytical abilities. In other words, it is also called a priori reasoning.
In this form of reasoning, we have 3 stages of deductive reasoning:
– Researching a task.
– Creating hypothesis.
-conducting a test on the hypothesis researched.
This reasoning provides a hypothesis and it is being verified, it results to general economic principle or law.
ADVANTAGES OF DEDUCTIVE REASONING
It is a simple method. It does not involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.
DISADVANTAGES OF DEDUCTIVE REASONING
In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.
INDUCTIVE REASONING
This form of reasoning moves from facts to theory. First, Data collection is performed and then providence of evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods.
Data collection of a particular economic theory and then conclusions are drawn. The stages in this method are:
-Observation.
-Formulation of a hypothesis.
-Generalizing principles.
-Verifying against actual facts.

ADVANTAGES OF INDUCTIVE REASONING
Since it is based on facts it is more realistic and reliable.Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.

DISADVANTAGES OF INDUCTIVE REASONING
If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable. It is a time-consuming process and thus expensive as well. The collection of all the data is not an easy job and varies from person to person. As to how they collect data.

There are two basic Methods Involved in Economics Analysis Namely:
1. Deductive Method
2. Inductive Method

1. Deductive Method- the method Derives new Conclusion from the fundamental assumption established by other methods.As a Deductive method,it has a prior Reasoning, certain laws and principles which are assumed to be the analysis of fact .
In Deductive Method,it involves Information, pattern,tenative Hypothesis etc

2. Inductive Method- this method Comes with specific details and ends with an abstract.
The mode of learning becomes more interesting at the outset because of the references students begin with In what they know.
Inductive Method comprises of the theory, hypothesis, observation and confirmation.

The basic methods of analysis used by economists are: Deductive method and Inductive method

1) Deductive method:
This method represents an approach to the derivation of economic generalisation and theories. In order to derive economic generalisations through deductive logic we begin by identifying the problem, defining technical terms and relevant variables, making assumptions, processing of logical deduction to derive implication, formulation of hypothesis, making predictions and testing them and finally making sure the predictions are in agreement with facts.

2) Inductive method:
The inductive method can also be called Empirical Method. The inductive method derives economic generalisations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisations which follow from the observations collected.

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Faculty-sociail sciences

Economic analysis involves the formulation of laws and generalization through two methods (a) Deductive (b)inductive.
(1)Deductive method is also called a priori reasoning.it is also called abstract,analytical and represents an abstract approach to the derivation of economic generalisations and theories.it is also seen as a conclusion after having interpretations from premises.in this kind of reasoning we go from a general to specific.
The stages in deductive includes (i) observation of a task or issue,making the hypothesis.
(ii)Testing the hypothesis using more observations etc.
It is a simple method that doesn’t involve the use of any complex software analysis etc.

(2)Inductive methods which is also called empirical
Method derives economics generalisations on the
Basis of experience and observation.
In this method, detailed data are collected with regardes,a certain economics phenomenon and effort is then made to arrive at certain generalisations which follow from observations collected.but it is worth mentioning that the number of observations has to be large if it can yield a valid economic generalization.one should not generalize on the basis of a very few observations.

The deductive profiling method relies on the
application of deductive reasoning to the observable evidence.investigators collect general information about something base on the profilers experience, knowledge and critical thinking.

The deductive method involves several distinctive steps
(a)A problem is stated
(b) information is collected
(c)A working hypothesis is formulated
(d) The hypothesis is tested
(e)Result of the test are examined
(f) one or more conclusions are reached

Name: OBI AMARACHI CELESTINA
Reg No: 20855804BA
Dept: PALG
Matric No: 2020/243303
Email: amaratina20@gmail.com

1 Inductive method: The inductive method which is also called empirical methods drives economic generally on the basis of experienment and observation. Therefore inductive method or reasoning is a type of method or reasoning that involves drawing a general conclusion from a set of specific observations. In this method is detailed data are collected with regard to a certain economic phenomenon and efforts is made to arrive at a certain generalizations which follows from the observations collected.

There are three ways which can be used for driving economic principles and theories
1 Experiementation
2 Observations
3 statistical or econometric methods.

Various steps in inductive method
1 the first step is to identify the problems.
2 The second step is defining technical and variables related to the problem
3 the third step which is very important in the inductive method is the collection of data about the variables related to the problem and doing some preliminary thinking about the possible functional relationships between the relevant variables.
4 Another important step is the constructions of economic theories: this is processing of data collected and finding out what relations between the variables actually hold good.

2 Deductive method: In deductive method of economic Analysis, we proceed from general to the particular. This is also known as an hypothetical method for some of the assumptioms may not correspond to actual facts, but very near actual facts which may be used as premise for starting, reasoning and drawing conclusions.
The Deductive method drives new conclusions from fundamental assumptions or from the truth established by other methods. It involves the process of reasoning from certain laws or principles, which are assumed to be true to the analysis of facts.

They are steps of driving economic generalizations through deductive method:
1 perception of the problem to be enquird into: the analyst must have a clear idea of the problem to be enquird into, in order not to make mistakes.
2 Definition of technical terms and making of assumptions
Deducing hypotheses, that is driving conclusions from the premises through the process of logical reasoning
4 Testing hypothesis deduced.

Name: umeh success precious
Department :social science education
Reg no:20027052GA
Email:successprecious41@gmail.com
In economic analysis two methods are being used 1. The deductive method 2.the inductive method.

1.deductive method: it starts from unchallenged elementary assumption and then arrive at conclusions using logical analysis or our analytical abilities. It is also called abstract, analytic method and a priori reasoning.
The stages are:
-observation of a task (realistic one)
-making the hypothesis
-testing the hypothesis using more observation
Note: if this hypothesis gets verified we get general economic principles or laws.

2.inductive method: this type of reasoning flow from facts to theory. First we collect information and then move towards providing evidence using economic theories and facts.
Data is collected about a particular economic theory then conclusion is drawn.
The stages are:
-observation
-formulation of a hypothesis
-generalizing principles
-verifying against actual facts.

Name: Ugwu adanna chiamaka
Jamb registration number: 20694893BA
Department: public administration and local government.
Email: ugwu.adannachiamaka@gmail.com

METHOD OF ECONOMIC ANALYSIS
There are two basic methods of economic analysis namely
I Deductive method
ii Inductive method
DEDUCTIVE: The deductive method is also called abstract, analytical and a priori method and represents an abstract approach to the derivation of economic generalisations and theories.
The principal steps in the process of deriving economic generalisations through deductive logic are:
(a) Perception of the problem to be enquired into;
(b) Defining precisely the technical terms and making appropriate assumptions, often called postulates or premises;
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(c) Deducing hypotheses, that is, deriving conclu­sions from the premises through the process of logical reasoning; and
(d) Testing of hypothesis deduced.
VARIOUS STEPS IN DEDUCTIVE METHOD
1 identify the problem
2 Defining technical terms and relevant variables
3 Making Assumption
4 process of logical deduction to derive implications
5 Formulation of hypothesis
6 Making predictions and testing them
7 Predictions are in agreement with facts.

2. Inductive Method:
The inductive method which is also called empirical method derives economic generalisations on the basis of experience and observations. In this method detailed data are collected with regard to a certain economic phenomenon and effort is then made to arrive at certain generalisations which follow from the observations collected.
But, it is worth mentioning that the number of observations has to be large if it can yield a valid economic generalisation. One should not generalise on the basis of a very few observations. There are three ways which can be used for deriving economic principles and theories.
They are:
(a) Experimentation,
(b) observations,
(c) statistical or econometric method.

Various Steps in Inductive Method:
Various steps are gone through in developing economic theories through inductive method. The first step, as in the deductive approach, is to identify the problem. The second step is defining technical terms and variables related to the problem.
It is the next step which is peculiar to the inductive method, namely, the collection of data about the variables related to the problem and doing some preliminary thinking about the possible functional relationships between the relevant variables.
The next important step in the construction of economic theories in this method is the processing of data collected and finding out what relations between the variables actually hold good. From this, a theory is developed which can be further refined and tested through statistical methods.
Once the theory has been developed one can make predictions on its basis, as is done in the deductive approach. If predictions of theory are in agreement with the facts and actual behaviour of the economy, then a new reliable theory has been developed. If a new theory explains “how things work” better than the existing ones, it replaces them.

Conclusion: Integration of Two Methods:
Now, the controversy which existed among the earlier economists as to whether deductive or inductive approach is more appropriate in developing economic theories and principles has been resolved. The modem viewpoint in this regard is that both are needed for the proper development of scientific economic theories. Indeed, the two are complementary rather than competitive.

The basic methods of economic analysis used by Economists are:
A. Deductive method
B. Inductive method

A. Deductive method: It is also known as abstract method.
It consists in deriving conclusions from general truths.
It takes a few general principles and applies them,then draws conclusions.
The classical and neo-classical school of Economists like J.S Mill,Malthus,applied this method in their economic investigations.

Steps of Deductive method
1. Perception of the problem to be inquired into: i.e the economist must have a clear and precise idea of the problem to be inquired.
2. Defining of terms: i.e to define clearly the technical terms used in analysis. Further assumptions made by the theory are then made precise.
3. Deducing hypothesis from the assumptions.
4. Testing of hypothesis: i.e verification of hypothesis through direct observation in the real world ,and statistical methods.

Merits of Deductive method
1. It is near to reality,less time consuming,less expensive.
2. Mathematical techniques are used in deducing theories of economics,which brings exactness and clarity in economic analysis.
3. The method is analytical
4. It helps in deriving economic theories using limited scope of experimentation.

Demerits of Deductive method
1. It is simple and precise only if the assumptions are VALID. More often ,the assumptions turn out to be half truths and are misleading,or have no relation to reality.
2. The method is highly abstract,and requires a great deal of care,to avoid bad logic and faulty economic reasoning.
3. Prof Learner described it as “armchair analysis” i.e the premises from which inferences are drawn,may not hold good at all times.

B. Inductive method
It is also called empirical method. It was adopted by the “Historical School of Economists”. It involves the process of reasoning from particular facts to general principles. It derives economic generalization on basis of:
i. Experimentation
ii. Observation
iii. Statistical methods
In this method,data is collected about a certain economic phenomenon, systematically arranged,and conclusions are drawn.

Steps of Inductive method
1. Observation
2. Formation of hypothesis
3. Generalization
4. Verification

Merits of Inductive method
1. It is based on facts. The method is realistic.
2. The method is more reliable because it makes use of statistical techniques to test economic principles.
3. The method is dynamic.
4. The method helps in future investigations.

Demerits of Inductive method
1. If conclusions are drawn from insufficient data,the generalizations may be faulty.
2. The collection of data is a difficult task and the method employed differs from investigator to investigator. This may lead to different results for same problem.
3. The method is time consuming and expensive.

CONCLUSION
Both methods have weaknesses. We cannot rely exclusively on any one. Modern Economists are of the view that the methods are complimentary. We can apply any or both,as situation demands.

Name: Ejiofor chiamaka Jane
Email: ejioforchiamaka20@gmail.com
Reg no: 20641402EA
Inductive reasoning is a method of reasoning in which premises are viewed as supplying some evidence,but not full assurance,of the truth of conclusion.it is also described as a method where one’s observation and experience including what is learned from others are synthesized to come up with a general truth.
Deductive reasoning,also known as deductive logic,it is the process of reasoning from one or more statements to reach a logical conclusion as that of contributional, and links premises with conclusion.

NAME: UGWUADA SAMUEL MMADUKAIHE
REG.NO. 20689639GA
DEPARTMENT: PHILOSOPHY.
There two method used in economics analysis.;they are.
No 1.
DEDUCTIVE METHOD: This is also called priori or abstract method. here we start unchallenged elementary or redimentary assumption, then arrive at conclusion.
Stages that it take to reach conclusion are.
a. Observation of task or issue.
b. Making appropriate assumption, often called postulates or premises.
c. Making the hypothesis
C. Testing the hypothesis using more observations.

No 2.
INDUCTIVE METHOD; this type of generalizations flows from facts to theory.it also refers as empirical method.
In inductive method the economist collect information and facts and then move towards providing evidence using economic theory and facts.
This method formulates principles using the sub-methods like. Observation, experimentations, statistical methods.
There are many stages economist can arriveus at his theory are;
a.Observation
b. Formulation of a hypothesis
C. Generalizing the principles
D. Verifying against actual facts.

Name: sylvanus favour chinagorom
Matric no :2020/242141.
Email address: sylvanusfavouchi7@gmail.com
Department: Business education.
METHODS OF ECONOMIC ANALYSIS
Any economic analysis involves the formulation of laws and generalizations through two methods: Deductive and Inductive.
Inductive method: is also called empirical method .it involves the process of reasoning from particular facts to general principle. It also makes use of econometric packages.This method derives economic generalization on the basis of:
*Experimentations
*observations
*Statistical methods.
Deductive method:In deductive method of economic analysis we proceed from the general to the particular or main.This is also known as hypothetical method for some of the assumptions may not correspond to actual facts,but very actual facts which may be used as premise for starting, reasoning and drawing conclusions.

Name: Ezema Amarachi julieth
Reg number:20690143BA
Dept: Public Administration and Local Government

METHODS OF ECONOMICS ANALYSIS
An economic theory derives laws or generalization through two methods
(1) Deductive method and
(2) Inductive method.
These two ways of deriving economic generalizations are now explained in brief:
(1) Deductive method of Economics Analysis:
The Deductive method is also named as analytical, abstract,prior method.The deductive method consists in deriving conclusion from general truth , takes few general principles and applies them draw conclusions.
Inductive method of Economics Analysis:
Inductive method which is called empirical method was adopted by the Historical school of Economist .It involves the process of reasoning from particular facts to general principles.
This method derives economic generalization on the basis of
(1) Experimentations
(2)Observations and
(3)Statistical methods
In this method, data is collected about a certain economic phenomenon .
These are systematically arranged and the general conclusion are drawn from them

Name : Okoye Steve Chukwuzulum
Dept : Nursing science
Reg no : 20642470CA
Email: chukwuzulumsteve@gmail.com

1. Deductive Method
This is also called a priori reasoning. We start from unchallenged elementary or rudimentary assumptions/ facts and then arrive at conclusions(build a hypothesis or theory) using logical analysis or our own analytical abilities. In this kind of reasoning, we go from general to specific. The stages in deductive reasoning are:

Observation of a task/ issue
Making the hypothesis
Testing the hypothesis using more observations, etc.
This reasoning gives us a hypothesis and if this hypothesis gets verified we get general economic principles or laws.

Advantages of Deductive Method
It is a simple method, doesn’t involve the use of any complex software analysis, etc. only simple deductive logic is required.
This method is important for economists as it focuses upon economic reasoning which is of paramount importance.

Disadvantages of Deductive Method

In this method of reasoning we start from assumptions, thus, if the assumptions happen to be logically flawed the whole process becomes faulty and would give wrong conclusions. Thus, the logical fallacy is a disadvantage of this method.

2. Inductive Method
This type of reasoning flows from facts to theory. First, we collect information and facts and then move towards providing evidence using economic theory and facts. This method formulates principles using the sub-methods- Observations, Experimentations, Statistical methods.

Data is collected about a particular economic theory and then conclusions are drawn. The stages in this method are:

Observation
Formulation of a hypothesis
Generalizing principles
Verifying against actual facts.

Advantages of Inductive Method
Since it is based on facts it is more realistic and reliable.
Using statistical methods and experimentations makes the process more scientific, thus, more acceptable universally rather than just depending on your own reasoning and logic.
Since the economic environment is dynamic and always changing, relying upon a more scientific method always helps reach logical conclusions.

Disadvantages of Inductive Method

If the data used is insufficient and faulty it would lead to faulty conclusions, making the hypothesis less reliable.
It is a time-consuming process and thus expensive as well.
The collection of all the data is not an easy job and varies from person to person. As to how they collect data.

Name: Assi Sylvia Idara
Reg no.: 2019/243322
Department: pure and industrial chemistry
The two methods used by economists are:
1. Inductive reasoning
2. Deductive reasoning
1. Inductive reasoning: it is a type of logical thinking that involves forming generalizations based on specific incidents you’ve experienced, observations you’ve made, or facts you know to be true or false.it is an important critical thinking skill that many employers look for in their employees. Bacon described it as “an ascending process”. It expects the economist to be primarily an economic historian who should first collect material, draw generalizations and verify the conclusions by applying them to subsequent events. Inductive reasoning is dynamic, realistic, future enquiries and statistical method. It’s demerit is: it is time consuming and expensive.

2. Deductive reasoning: is an inference from the general to the particular or from the universal to the individual. The deductive method derives new conclusions from fundamental assumptions or from truth established by other methods. It involves the process of reasoning from certain laws or principles, which are assumed to be true, to the analysis of facts, then inferences drawn which are verified against observed facts. Bacon described deductive reasoning as “a descending process ” in which we proceed from a general principle to it’s consequences. Deductive reasoning is real, simple, powerful and exact. It’s demerit is: it is based on assumptions and it is abstract

Name: Ibeh Augustine Ifechukwu
Registration no: 20686430FA
Department: Nursing/Nursing sciences.
Email: ibehaugustine5000@gmail.com

METHODS OF ECONOMIC ANALYSIS.
The basic methods of analysis used by economics are;
1. Deductive method.
2. Inductive method.

1. DEDUCTIVE METHOD OF ECONOMIC ANALYSIS.
The deductive method is also named as analytical, abstract or prior method. The deductive method consists in deriving conclusions from general truths, takes few general principles and applies them, draw conclusions. For instance if we accept the general proposition that man is entirely motivated by self-interest. In applying the deductive method of economic analysis, we proceed from general to particular.

STEPS OF DEDUCTIVE METHOD
The main steps involved in deductive logic are under:
i. Perception of the problem to be inquired into: In the process of deriving generalization, the analyst must have a clear and precise idea of the problem to be inquired into.
ii. Defining of terms: The next step in this direction is to define clearly the technical terms used analysis. Further, assumptions made for a theory should be precise.
iii. Deducing hypothesis from the assumptions: The third step is deriving generalizations is deducing hypothesis from the assumptions taken.
iv. Testing of Hypothesis: Before establishing laws or generalizations, hypothesis should be verified through statistical methods. ( Their inverse relationship between price and quantity demanded of a good is a well established generalizations.

MERITS OF DEDUCTIVE METHOD
The main merits of deductive method are as under:
i. This method is near to reality. It is less time consuming and less expensive.
ii. The use of mathematical techniques in deducing theories of economics brings exactness and clarity in economic analysis.
iii. There being limited scope of experimentation, the methods helps in deriving economic theories.
iv. The method is simple because it is analytical.

DEMERITS OF DEDUCTIVE METHOD
i. The deductive method is simple and precise only if the underlying assumptions are valid. More often the assumptions turn out to be based on half truths or have no relation to reality. The conclusions drawn from such assumptions will, therefore, be misleading.
ii. Professor Learner describes the deductive method as ‘armchair’ analysis. According to him, the premises from which inferences are drawn may not hold good at all times, and places. As such deductive reasoning is not applicable universally.
iii. The deductive method is highly abstract. It requires; a great deal of care to avoid bad logic or faulty economic reasoning.
As the deductive method employed by the classical and neo-classical economists led to many facile conclusions due to reliance on imperfect and incorrect assumptions, therefore, under the German Historical school of economists, a sharp reaction began against this method. They advocate a more realistic method for economic analysis known as inductive method.

2. INDUCTIVE METHOD OF ECONOMIC ANALYSIS
Inductive method which also called empirical method was adopted by the ” Historical school of Economists”. It involves the process of reasoning with particular facts to general principle.
This method derives economic generalization on the basis of i. Experimentation, ii. Observation and iv. Statistical methods.
For example, we observe 200 persons in the market, we find that nearly 195 persons buy from the cheapest shops, out of the 5 which remains, 4 persons buy local products, while the fifth is a fool. From this observation, we can easily draw conclusions that people like to buy from a cheaper shop unless they’re guided by patriotism or they are devoid of common Sense.

STEPS OF INDUCTIVE METHOD
The main steps involved in inductive method are:
1. Observation
2. Formation of hypothesis
3. Generalization
4. Verification.

MERITS OF INDUCTIVE METHOD
1. It is based on facts as such the method is realistic.
2. In order to test the economic principles, methods makes statistical techniques. The inductive method is, therefore, more reliable.
3. Inductive method is more dynamic. The changing economic phenomenon are analyzed and on the basis of collected data, conclusions and solutions are drawn from them.
4. Inductive method also helps in future investigations.

DEMERITS OF INDUCTIVE METHOD
1. If conclusions are drawn from insufficient data, the generalizations obtained may be faulty.
2. The collection of data itself is not an easy task. The sources and methods employed in the collection of data differ from investigator to investigator. The results, therefore, may differ even with the same problem.
3. The inductive method is time consuming and expensive.

Ind

NAME: EKE JOSHUA OKWUCHUKWU

JAMB REGISTRATION NUMBER: 20033384DF

MATRIC NUMBER: 2020/242585

DEPARTMENT: ECONOMICS

G-MAIL ADDRESS: ekejoshuaokwuchukwu@gmail.com

METHODS OF ECONOMIC ANALYSIS:

They are divided into two. They are ;

1. Deductive Method
2. Inductive Method

1. DEDUCTIVE METHOD :
The deductive Method is based on an abstract approach to the derivation of economic generalizations and theories.
The steps involved in deriving these theories and generalizations include:

a) Perception of the problem: This entails conscious understanding of the problem under consideration.

b) Precisely defining the technical terms and making assumptions. These assumptions maybe behavioural (behaviour of economic variables) or technological (relating to the state of technology).
But these assumptions do not apply in some cases.

c) Deduction of hypothesis based on those assumptions made.
Hypothesis can be viewed as an assumption taken to be true for the purpose of further argument or investigation.

d) Testing and verifying these hypothesis:
The deducted hypothesis needs to be verified before they are established as generalizations or Economic principles. Testing of these hypothesis can also be in statistical form.

2. INDUCTIVE METHOD :
The inductive method uses econometric package in experimentations.
It derives Economic generalizations on the basis of experience and observations. It involves data collection with reference to a certain economic phenomenon. These data obtained can help in the establishment of economic principles and theories.

The three main ways of deriving these economic principles include:
a) Experimentation
b) Observation
c) Econometric / Statistical Method.

Name: Ogbu Emmanuel Azubuike
Department: Sociology and Anthropology
Reg number: 21649423GF

Economists have basic ways through which they analyse Economics, any economic analysis involves the formulation of laws and generalisation through two methods; Deductive and inductive method.

1. Deductive method : this is refered to as the prior reasoning. We start from practical assumptions and arrive at conclusions (hypothesis) using logical analysis or our own analytical abilities. This method has different stages which are the
* Observation of a task
* Making the hypothesis and;
*Testing the hypothesis using more observations.
When the hypothesis of this stage is verified it becomes an economic principle.

2. Inductive method: this method flows from facts to theory . First, information and facts are collected and then we move towards providing evidence using Economic theory and facts. This method formulates principles using sub method, observations, experimentation, statistical method.
Data is collected about a particular economic theory and then conclusions are drawn.
The stages are:
*Observation
* Formulation of hypothesis
* Generalising principles
* Verifying against actual facts.

Nnamdi Peace Munachukwumu
Nursing Sciences
20690492HA

2 Methods of Economic Analysis.
1. Deductive Method: This is also called Abstract Analytical and A Prior Method. It’s Derives Economic Generalization on the Basis of an “Abstract Approach”.
Principle Step in the Process of Deriving Economic Generalization through Deductive Logic are:
-Perception of the Problem to be enquired Into.
-Deducing Hypothesis , (Deriving Conclusions through the process of Logical Reasoning).
-Testing of Hypothesis deduced.

2. Inductive Method: This Method is also called “Empirical Method”. It derives Economic Generalization on the Basis of ”Experiment and Observation “.
This Method also involves the Collection of Detailed Data with regards to a certain Economic Phenomenon and Efforts are made to arrive to a Certain Generalization which will be Gotten from the Observations Collected.
~However, The number of Observation has to be large before it can yield valid Economic Generalization.
Principle steps in the Process if Deriving Economic Generalization through Inductive Logic:
-Experimentation
-Observation
-Statistical Econometric Method.

Name.. okafor chinenye Juliet
Department.. philosophy.
Reg no..20639794AF
E-mail.okaforjulet42@gmail.com.
METHOD OF ECONOMIC ANALYSIS.
(1). DEDUCTIVE METHOD.
This is a method of verifying existing knowledge which look deep into complex problem on the basis of generally accepted laws and basic assumption,it is also called abstract method which starts from a broad sense and narrows down to small point.
(2) INDUCTIVE METHOD
This is based on observation of fact as problem, then establish reasoning and solutions in the method, it is a method of discovering new knowledge, it is also called empirical method.inductive method uses econometric packages such as e-views ,stats etc in making generalization.

Name:Isife Sopuruchukwu Esther
Reg no:21273370JA
Department: Philosophy
Email address: isifesopuru@gmail.com
There are two most important methods of analysis used by economists.They include:
1.Deductive method
2.Inductive method

1.Deductive method:This is also called abstract,analytical priority method and represents an abstract approach to the derivation of economic generalizations and theories.A law of generalizations describe relationship between variables ,it does not provide any explanation of the described relation.
The principal steps in the process of deriving economic generalizations through deductive logic are:
*Perception of the problem to be enquired
*Defining precisely the technical terms and making assumptions
*Deducing hypothesis
*Testing of hypothesis deduced
Merits of deductive method
*Useful mathematical techniques can be employed to derive laws and theories of economics
*Deductive methods does not require detailed collection of data unlike inductive methods
*It is less time consuming and less expensive
*Shortcomings of deductive analysis may not be overlooked
Demerits of deductive analysis
*It may not have any operational significance based on highly unrealistic assumptions
2.Inductive method:Inductive methods is also called empiral method.In this method detailed data are required and collected with a regard of a certain economic phenomenon which is made to arrive at certain generalizations which follow from the observation collected
The three ways used are:
*Experimentation
*Observation
*Statistical or econometric method
Merits of inductive analysis
*It is highly practical and realistic
*They are not universal but valid under various efforts
*It’s helpful in varying conclusions
Demerits of inductive analysis
*It is not of much value if it’s not supported by the economic hypothesis or theory developed for deductive logic.
*There is a great risk of conclusion being drawn from insufficient data
*One must make sure they take care of sufficient number of observation or data been taken into account.
*Collection of data is not an easy task
A researcher using inductive method must know how to process and interpret data
*Compared to deductive method ,inductive method is time consuming and expensive.
Conclusions:Distinguishing the two methods if predictions are found to be real with facts ,the theory but if the predictions are found inconsistent with facts ,it is rejected.