Economics is a social science that uses scientific method namely;

• A Hypothesis: It is constructed about economic behavior that may be right or wrong.
• A Model: It is built describing the behavior of influencing factors involved in the initial hypothesis.
• The hypothesis is tested against real world evidence by the use of inductive and deductive methods.
• If the hypothesis cannot be disproved, it becomes and accepted theory

Inductive and Deductive Methods

Inductive method refers to coming to a general conclusion from observing a particular events or occurrences where as the deductive method refers to the coming of a particular conclusion from an accepted assumption. The two methods are similar or complementary.

Positive and Normative Statements

Positive economics or statements deal with facts. Such statements must either be true or false. Example: Edea is in Littoral region.

Normative statements or economics refer to issues of opinion which cannot be proved or disproved. They are based on value judgment. Example: Developing countries ought to receive loans from developed countries. They deal with facts that had happened, are happening or can happen.