Download Hidden Fallacies

ECONOMIC
ANALYSIS
HIDDEN FALLACIES
POST HOC ERGO PROPTER
Post Hoc Propter Hoc- “ it happened before this,
therefore it happened after this”
• Ex- A occurred, then B occurred therefore, A
caused B.
FALLACY OF COMPOSITION
Fallacy of composition- a statement that is true for
the individual but not for the group.
• Ex- 1. Atoms are not visible to the naked eye,
humans are made up of atoms. Therefore, humans
are not visible to the naked eye.
FALLACY OF SINGLE CAUSATION
Fallacy of Single Causation- a single factor or person
caused a particular event to occur
• E.x- because of the Great Depression, the stock
market crashed
• Ex- because of all the McDonalds food the boys
ate they got fat
LOADED TERMS
Loaded Terms
• Words that have side effect meanings
• Ex. “right sizing” really means laying off employees
• Ex. “stimulus spending” which does not occur until
the economy is on its way to recovery
GOALS FOR THE CANADIAN ECONOMY
Factors that keep our country running:
• Political stability
• Reduced public debt
• Economic growth
• Increased productivity
• Equitable distribution of income
• Price Stability
• Full employment
• Viable balance of payments and stable currency
• Economic Freedom
• Environmental stewardship
GOALS FOR THE CANADIAN ECONOMY
• All these factors are needed to keep the economy
afloat.
• All factors have tradeoffs, opportunity costs.
• i.e. trying to distribute income- everyone has
different opinions on how money should be
distributed
POSITIVE + NORMATIVE ECONOMICS
Positive
-
Based on the analysis of
factual information
Also known as “analytical”
economics
Descriptive statements
-
Positive
Factual observations that
can be verified or
confirmed
Statements
- forecasts based on identified
behaviour patterns and
assumptions regarding
whether these patterns will
continue to change
- Can be confirmed or refuted by
continued observation and
analysis
ExampleCanadian soft wood lumber sales
to the Unites States are down 20%
from last year
Normative Economics
ExampleIf income taxes are reduced,
consumer spending will increase
Based on the expression of
opinions that reflect values
and beliefs
Known as “policy
economics”
Statement of opinions
- Involve value judgements
to articulate “what should
be”
- Cannot be confirmed
- Require political decision
making; focused on the
common good or well
being of a society
ExampleGovernments should provide
affordable day care for
working parents